Capital goods production expands in June, led by capex revival

The Index of Industrial Production for June, released on Friday, showed capital goods output -- which is a barometer of investment -- rose by 26.1 per cent over the year-ago period, the sharpest among key categories within the index.

Unlike in May 2022 or June 2021, when capital goods output was led by a favourable base, the month under review saw no such base effect, sector experts said. Instead, the sharp rise in output, explain analysts at ICICI Bank Research, was due to a revival in capital expenditure (capex) by companies.

"Government capex activity is on track. This will usher