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Feb IIP doubles to 5% M-o-M, economy sees signs of revival

Industrial production grew 5 percent percent in February mainly on account of improvement in manufacturing activity and a rebound in consumer non-durables. Factory output, measured by Index of Industrial production (IIP) was 2.6 percent in January.

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Industrial production grew at 5 percent in February, close to 18 month high, mainly on account of improvement in manufacturing activity, a rebound in consumer non-durables and also due to a lower base effect. A CNBC-TV18 poll had estimated it at 3.6 percent

As per government data released today, manufacturing posted a growth of 5.2 percent (3.3 percent in January) while consumer non-durable jumped to 10 percent (vs -0.1 percent in Jan). However, consumer durables recorded a negative growth of 3.4 percent, but it is an improvement over last month. Overall Consumer goods recorded a growth of 5.2 percent.

Factory output, measured by Index of Industrial production (IIP) was 2.6 percent in January. The cumulative growth for the period April-February 2014-15 over the corresponding period of the previous year stands at 2.8 percent. The Indices of Industrial Production for Mining and Electricity sectors grew 2.5 percent and 5.9 percent as compared to February 2014.

Experts’ take

The big bump in the macro data, however, fails to impress Soumya Kanti Ghosh, Chief Economic Advisor, State Bank of India who adds that the 5 percent traction is merely due to a lower base of February 2014.

“We are closer to the greenshoots now. If one looks at the numbers from November onwards it has been positive. February has been positive, March should also be better because March is generally a seasonal month where it does better. I will be very closely watching the April number. So, the April number if it comes in say around 2 or 3 percent then it will confirm that possibly we are out of woods,” he adds.

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