Industrial activity grows 5.7% in Nov despite demonetisation
The Dollar Business Bureau
Notwithstanding the government’s demonetisation drive, India’s industrial activity grew to a 13-month high, at 5.7% in November, while overall domestic economic activity also registered an upward movement, according to the data released by the Index of Industrial Production (IIP).
The manufacturing industry, which makes up 75% of the index, expanded 5.5% in November, against a 2.4% decline in October. Electricity generation rose almost 9%, against just 1% a year ago; mining production rose 4%, against a decrease of 0.7% in November 2015. After a 27% decline in October, capital goods, too, witnessed a spurt of 15%.
In automobile segment, tractors production was up 95%, passenger car production was up 29.5% and motor vehicles, trailers & semi-trailers production grew 23.2%, in November. Radio, TV and communication equipment rose 30%, electrical machinery & apparatus grew 23% and machinery and equipment surged 13%.
The consumer durables segment registered an almost 10% growth in November, against a 0.6% growth a year ago.
In November, Prime Minister Narendra Modi’s sudden decision to withdraw old Rs.500 and Rs.1000 currency notes had triggered panic among the country’s several key industries. The November 8 decision, however, had a significant impact on retail inflation, which, slowed to a 25-month low in December due to declining vegetable prices, thereby triggering hopes that the Reserve Bank of India (RBI) will initiate a rate cut in interest rates when it reviews bi-monthly monetary policy in February.
According to the Central Statistics Office (CSO) data, industrial production rose an annual 5.7% in November as against a decline of 3.4% a year ago. The industry’s November growth was helped by the positive base effect and the expansion of capital goods, consumer durables and manufacturing sectors.
During April - November, industrial production rose 0.4% compared to 3.8% during the corresponding period of last year.
