The growth rate of India’s industrial output picked up for the second month running, giving both government officials and independent analysts hope that the long-awaited recovery may have begun. However, they agree that the monsoon may play a crucial role in determining which way the situation moves. Official data on the index of industrial production (IIP) released on Friday showed that industry grew by 2.7% in May on a year-on-year basis. That’s a significant improvement on the April growth rate of 1.2%, which had been preceded by four successive months of negative growth.
Finance secretary Ashok Chawla was quick to point to the data as confirmation of the government’s expectation that the stimulus packages would start having an effect. `I think we are back on track as was expected,’’ he said. The trend of growth, Chawla added, would continue and sectors which were still showing negative growth like capital goods and consumer non-durables would improve in the coming few months. The finance secretary conceded that the monsoon, which has been playing truant in the north so far, is a matter of concern and if it remains below par that could have an impact on various segments.
Finance secretary Ashok Chawla was quick to point to the data as confirmation of the government’s expectation that the stimulus packages would start having an effect. `I think we are back on track as was expected,’’ he said. The trend of growth, Chawla added, would continue and sectors which were still showing negative growth like capital goods and consumer non-durables would improve in the coming few months. The finance secretary conceded that the monsoon, which has been playing truant in the north so far, is a matter of concern and if it remains below par that could have an impact on various segments.
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