Industrial production in India accelerated the fastest in seven months in January, growing by 6.8 per cent due to a surge in non-consumer durables like food products and beverages. Capital and intermediate goods, however, were still in the red for the fifth consecutive month, contracting by 1.5 per cent and 3.2 per cent respectively.
Consumer durables also contracted 6.8 per cent, while basic goods grew by a lacklustre 1.6 per cent, indicating that industry and investment were not picking up.
“The Index of Industrial Production numbers for January should be looked at with caution. The sudden high growth in consumer non-durables seems confounding. Though IIP has recorded high growth, the sharp volatility makes it extremely difficult to decipher actual trends in production patterns,” said Dr Arun Singh, senior economist, Dun and Bradstreet India.
Both the finance minister and the Planning Commission deputy chairman expressed caution while celebrating this surge. “The IIP is 6.8 per cent in January. There is strong recovery in the backdrop of last December’s figure, where the IIP grew 2.8 per cent”, said finance minister Pranab Mukherjee, adding that sectoral analysis showed little progress in capital goods and consumer durables. “This is a matter of concern”. Mr Mukherjee added “efforts will have to be made to build up these areas”.