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Positive IIP growth in April indication of better prospects in coming months: Industry
According to official data released on Thursday, industrial production grew at 3.4% in April a day after official data showed exports growth is at a six-month high. It is a good news as factory output had contracted in the previous two months. The bounce-back came on the back of recovery in output of manufacturing, electricity production, mining and capital goods.
When IIP (index of industrial production) contracted 1.2%, factory output had started to decline in October and continued till December. For the month of January the growth became positive and downed into negative territory again in February. IIP had shown growth of 1.5% in April 2013.

The latest data is surely a good sign for the new Government which is looking to revive the jobs-creating manufacturing sector. Manufacturing, the back bone of the index, grew 2.6% in April against 1.8 % in the same month last year.

Industry body FICCI while commenting on the IIP data for April 2014 said, "Revival of the manufacturing sector is an absolute need of the hour. Higher export growth in May and positive growth in manufacturing in April, indicates better prospects for industry in coming months but it may be too early to construe it as recovery sign and we need to see if this would be a sustainable growth", said Sidharth Birla, President, FICCI.

"We look forward to some big ticket measures by the Government in its forthcoming budget which could send strong signals to investors and restore their confidence in the economy", said Mr Sidharth Birla, President, FICCI.

The production of capital goods growing 15.7% against a contraction of 0.3% in April 2013 has helped to improve the business sentiment during the month. The mining sector witnessed a growth of 1.2% against a 3.4 % contraction in April 2013 and power generation increased 11.9% against 4.2% in the same month of 2013.

But consumer sentiment continued to remain dimmed as consumer goods output shrunk 5.1% in April against 1.7% growth a year ago. And consumer durables also contracted 7.6%, though the decline was lower than the 9.6% dip in April 2013.

Consumers non-durables production also declined by 3.3% against a growth of 11.3% in April last year.

The official release said that the Electrical Machinery and Apparatus sector showed the sharpest positive growth i.e 66.0% followed by Machinery and Equipment(9.6%) and Tobacco products(9.1%). On the other hand Radio, TV and Communication Equipment had showed the steepest negative growth(-31.6%) followed by Wearing Apparel, Dressing and Dyeing of Fur(-22.1%), and Motor Vehicles, Trailers and Semi-trailers (-14.6%).

Confederation of Indian Industry's (CII) Director General, Chandrajit Banerjee, said that the return of industrial growth to the positive terrain was noteworthy and had rekindled the hope of industrial recovery which is critical to lift the economy and mark a return to the path of growth.

“What is encouraging is that all the three major segments of industry viz mining, manufacturing and electricity have posted positive growth. The double digit growth of capital goods could mark a beginning of an upturn in investments backed by an improvement in business sentiments and fast clearances of stalled projects. Going forward, CII expects that quick and proactive government policies would return the ‘feel good’ factor and firm up growth,” said Banerjee.

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