Mumbai: The factory output growth in August surged to 9-month high of 4.2%, indicating an acceleration of industrial activities after the initial setback due to GST-related destocking much to the delight of the government which is facing criticism over poor handling of the economy.
Factory output recorded a muted 0.9 per cent growth in July 2017, which was the first month after GST implementation. The Index of Industrial Production (IIP) recorded 4 per cent growth in August last year.
During April 2017-August 2017 period IIP grew at 2.2%, down from 5.9% in the same period in 2016-17.
The recovery in industrial output is a clear indication that the companies have begun restocking and building fresh inventories after clearing up the stockpile in June ahead of the Goods and Services Tax’s (GST’s) roll out from July 1.
Factory output measured by the index of industrial production (IIP) is the closest approximation for measuring economic activity in the country’s business landscape.
Manufacturing sector, which accounts for more than three-fourth of the entire index, continued to growth at 3.1 percent in August, compared with 0.1 percent growth in July, government data showed.
The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of August 2017 stand at 92.7, 123.3 and 155.4 respectively, with the corresponding growth rates of 9.4%, 3.% and 8.3% as compared to August 2016.
The cumulative growth in these three sectors during April-August 2017 over the corresponding period of 2016 has been 3.3 percent, 1.6 percent and 6.2 percent respectively.