India's industrial output rose 4.7% in May on the back of a robust performance by the manufacturing and electricity sectors, bringing relief for the Narendra Modi government, which has vowed to revive the economy . In May 2013, industrial output declined 2.5%. This is the second consecutive month of expansion after output contracted 0.5% in March. The performance in May is the highest since October 2012.
The Modi administration unveiled its Budget for 2014-15 with plans to revive the manufacturing sector and the overall economy.
The government has undertaken a series of measures to script a turnaround, including easier approvals and clearing the approvals process. Sluggish industrial growth has hurt overall economic expansion, which slowed to below 5% for two successive years. The government expects growth in the current fiscal year in the 5.4% to 5.9% range.
The manufacturing sector rose an annual 4.8% in May compared to a decline of 3.2% in the same month last year, while the electricity sector grew 6.3% compared to a growth of 6.2% in May 2013.
The capital goods sector, a key barometer for economic activity, rose 4.5% year-on-year in May compared to a decline of 3.7% in May 2013.
Consumer goods and durables sectors showed some signs of a pick-up in growth.
The consumer goods sector grew an annual 4.5% compared to a decline of 3.7% in the year-ago period.
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