11 months ago

Modest rebound: On IIP data

India’s factory output growth slowed to 4.9% in March from a downgraded 5.6% uptick in February, despite benevolent base effects from the previous year when the Index of Industrial Production had shrunk 1.9%. Production growth was strongest for capital goods as well as infrastructure and construction goods for the second straight year — not surprising given the ramp up in government infrastructure spends to pump prime the economy till private capex recovers. Hopes of an above-normal monsoon may prop up rural demand dented by last year’s erratic rainfall, although tight credit conditions could impair urban consumption. The latest IIP data also reflect flagging momentum — growth slid to a three-quarter low of 4.9% between January and March.

The Hindu

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