In a robust turnaround, industrial output grew at five-year high rate of 9.8 per cent in October on impressive performance of capital and consumer goods, possibly driven by Diwali season demand.
The latest IIP figure marks a significant rebound from 3.84 per cent growth recorded in September 2015 and a contraction of 2.7 per cent in October last year.
The previous high in the index of industrial production (IIP) was in October 2010 at 11.36 per cent.
As per data released by the Central Statistics Office (CSO), the manufacturing sector, a key indicator of economic activity, grew 10.6 per cent year-on-year in October.
The consumer durables segment grew at a whopping 42.2 per cent in October over the same month last year. While the consumer goods category paced up at 18.4 per cent, capital goods grew at 16.1 per cent year-on-year.
"The latest IIP is very good. It's a high number, good number and encouraging number. But one has to be a little bit careful in interpreting this number... Especially this month as there is a Diwali effect," Chief Economic Advisor Arvind Subramanian told reporters today and expressed hope it would become a trend.
On IIP data, industry chamber Assocham said: "What is even more pleasing is a huge 16.1 per cent growth in capital goods, reflecting revival in investment cycle and a robust expansion of 9 per cent in electricity generation, which follows solid improvement in coal production."
Electricity generation expanded 9 per cent and the mining sector was up 4.7 per cent.
Consumer non-durables output expanded by 4.7 per cent, while the expansion in basic goods came in at 4.1 per cent in the month.
Some of the important items showing a high positive growth in October on an annual basis include gems and jewellery (372.5 per cent), sugar machinery (103.4 per cent), and telephone instruments, including mobile phones and accessories (61.5 per cent).
The cumulative growth in IIP for April-October 2015-16 was 4.8 per cent over the same period last fiscal.
