Industrial output grew 11.5% in July, helped by a low base effect, but several sectors such as manufacturing, mining, electricity and capital goods posted robust growth on easing of curbs after the second wave of Covid -19.
The sector had grown by 13.6% in June and during the April-July period it rose by 34.1% compared with a contraction of 29.3% in the same period last year.
The manufacturing sector grew an annual 10.5% in July compared with a contraction of 11.4% in the same month last year. The mining sector rose 19.5% during the month compared with a decline of 12.7% in July 2020, while the electricity sector grew by 11.1% compared with a contraction of 2.5% in the year earlier month.
The Covid-19 pandemic had inflicted a major blow to the industrial sector but the lifting of curbs has helped the recovery and economists expect the trend to persist.
“Amidst continued easing of favourable base support, the moderation was in line with expectations though the print is a tad above our forecast and market consensus. Nevertheless, sequential momentum in IIP remained at a strong level for the second consecutive month at 7.2% month-on-month in July 2021 (vs 5.7% in June 2021), underscoring the continued recovery in industrial activity...,” economic advisory firm QuantEco Research said in a note.
Recently, several indicators have pointed to a recovery in the sector and overall economic growth is forecast to grow in double digits for the the current financial year that ends in March.