Industry output rises 1% in December on growth in electricity, mining

India's industrial output, measured by the Index of Industrial Production (IIP), grew 1.04 per cent year-on-year in December, according to the data released by the Ministry of Statistics & Programme Implementation (MoSPI) on Friday.

The country's industrial output had contracted 2.10 per cent in November, while it grew 4.19 per cent in October, the data showed.

"For the month of December 2020, the quick estimates of Index of Industrial Production (IIP)with base 2011-12 stands at 135.9. The indices of industrial production for the mining, manufacturing and electricity sectors for the month of December 2020 stand at 115.1, 137.5 and 158.0 respectively. These quick estimates will undergo revision in subsequent releases as per the revision policy of IIP," the ministry said in a release.

Electricity sector output grew 5.1 per cent in December, while manufacturing also registered a 1.6 per cent growth. However, mining output contracted by 4.8 per cent.

For April-December, IIP contracted 13.5 per cent year-on-year compared to 0.3 per cent growth in the year-ago period. Industrial output was hit hard by the coronavirus pandemic and the nationwide lockdown imposed to spread the curb of infections. IIP declined for five consecutive months from April to August in financial year 2021-22, before returning to positive territory in September and October.

Emkay Wealth Management Head of Research Joseph Thomas said, "The IIP gives some broad indications of a rebound in economic activity with the reading for December at 1 per cent as against 2.10 per cent for November. What is significant is the pickup in both consumer durables and non-durables as also infra goods. While the general direction is of improvement in the reading, it may be too early to make any inference based on IIP numbers of a month of two."

While infrastructure goods output grew 0.9 per cent in December, that of consumer durables rose 4.9 per cent. Consumer non-durables output also increased by 2 per cent.

Meanwhile, retail inflation, calculated on the basis of Consumer Price Index, declined to 4.06 per cent in January from 4.59 per cent in December last year as food prices eased significantly. Inflation in food basket almost halved to 1.89 per cent in January as compared to 3.41 per cent recorded in the previous month.

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