IIP growth a morale booster for economy: India Inc

NEW DELHI: Cheering the spurt in industrial output which grew by 9.8 per cent in October, India Inc today termed it as a booster for the economy, hoping that the strong growth trend would continue on the back of reforms.

"The industrial growth on the back of an impressive double digit expansion in manufacturing should no doubt be considered a morale booster for the economy," Assocham President Sunil Kanoria said.

"We look forward to strong industrial growth recovery, with the sector registering double digit growth in the coming times," PHD Chamber Secretary General Saurabh Sanyal said.

In a big jump, the October industrial production grew 9.8 per cent on an annual basis, riding on the back of a robust growth in consumer products and capital goods during the festive season.

IIP growth for September has been revised upwards to 3.84 per cent while it was -2.7 per cent in October 2014.

The manufacturing sector, a key indicator of economic activity, grew 10.6 per cent year-on-year in October.

Electricity generation expanded 9 per cent and the mining sector was up 4.7 per cent.

"Though manufacturing registered a high growth in October, the low base in major sectors like capital goods and consumer durables has contributed significantly to this high growth.

"Nonetheless, the outlook for growth remains positive and can be strengthened in coming months if pace of reforms continues," Ficci Secretary General A Didar Singh said.

However, Singh pointed out that the global slowdown continues to impact trade and affect India's exports adversely thus impacting manufacturing growth especially when the domestic demand is also sluggish.

Hailing the October industrial production growth, engineering exporters' body EEPC India said a similar feat is desperately required in the country's export performance.

India's exports remained in the negative territory for the 11th month in a row by registering a dip of 17.53 per cent in October to $21.35 billion due to a demand slowdown, while trade deficit showed an improvement.

The growth in the consumer durables segment was a whopping 42.2 per cent in October over the same month last year. While, the consumer goods category saw a growth of 18.4 per cent and consumer non-durables rose by 4.7 per cent.

The data further showed that capital goods segment grew 16.1 per cent while the expansion in basic goods came in at 4.1 per cent.