According to the latest official figures, India’s industrial production increased to 5.2% in May from 4.5% in April 2023, owing primarily to strong performance in the manufacturing and mining sectors. In May 2022, factory output growth measured by the Index of Industrial Production (IIP) was 19.7%, owing primarily to a reduced base impact.
“The growth rates over the corresponding period of the previous year must be interpreted in light of the unusual circumstances caused by the COVID-19 pandemic beginning in March 2020,” an official statement said.
According to National Statistical Office (NSO) IIP data, the manufacturing sector’s output increased 5.7% in May 2023, compared to a 20.7% increase the previous year.
Power generation increased by 0.9% in May 2023, as compared to a gain of 23.5% the previous year. Mining output increased by 6.4% in the month under review, as compared to an 11.2% increase in the prior year.
Chief Economist, Piramal Enterprises, Debopam Chaudhuri, said that “Indian economic activity has been recovering, however, it has not been uniform. One of the major bottlenecks preventing India from reaching its true potential is the availability of capital to the most remote corners of the economy”.
He added, “Improved financial inclusion, deeper debt markets, and greater engagement by capital owners, including provident and pension funds, are required to restart the private capex cycle, particularly among MSMEs, which account for more than 30% of the GDP”.
According to use-based classification, the capital goods segment increased by 8.2% in May 2023 as compared to a 53.3% increase in May 2022. In contrast to a 59.1% surge in the same month last year, the output of consumer durables increased by 1.1% this month.
Consumer non-durable goods output climbed by 7.6% year on year, as compared to 1.4% growth the previous year. Infrastructure/construction goods increased by 14% in comparison to an 18.4% increase in the same period last year.
The report also showed that the output of primary goods increased by 3.5% in the month, compared to 17.8% in the previous year. The output of intermediate goods increased by 1.6% in May, compared to a 17.5% increase in the same month last year.
