New Delhi, Oct. 12: Industrial output rose 2.7 per cent in August, reversing the trend of contraction witnessed during the previous two months.
India Inc, however, expressed disappointment over the growth rate and urged the RBI to cut interest rates.
“The IIP figures are disappointing. What is of serious concern is the sharp drop in electricity production even as the manufacturing sector continues to stagnate because of faltering investments,” CII director-general Chandrajit Banerjee said.
IIP (index of industrial production) has contracted 0.18 per cent in July and 1.8 per cent in June.
Manufacturing, which accounts for the bulk of industrial production, rose 2.9 per cent in August, lower than 3.9 per cent a year ago.
Mining output grew 2 per cent against a contraction of 5.5 per cent in the same month last year. Consumer goods production was up 5 per cent compared with a growth rate of 2.1 per cent a year ago.
Capital goods production contracted 1.7 per cent against 4 per cent growth a year ago. Electricity output growth slumped to 1.9 per cent from 9.5 per cent in August last year.
Sonal Varma, economist with Nomura, said, “It seems the IIP numbers have bottomed out. I am looking at 2.2 per cent industrial growth for the full fiscal year. Consumer durables are doing well. However, it has to been seen whether it can be sustained. As of now, we are not expecting any rate cuts in October.”
The apex bank is scheduled to come out with the second-quarter monetary policy review on October 30 and the September inflation numbers are scheduled on Monday.