Growth in industrial production, as measured by the Index of Industrial Production, slowed down in September to 3.6 per cent from the break-neck 6.3 per cent achieved in August. Retail inflation for October, also released on Thursday, accelerated to 5 per cent from 4.4 per cent in September, marking the fourth consecutive month of consumer price inflation quickening.
“The General Index (of Industrial Production) for the month of September 2015 stands at 178.0, which is 3.6 per cent higher as compared to the level in the month of September 2014. The cumulative growth for the period April-September 2015-16 over the corresponding period of the previous year stands at 4 per cent,” the government said in a release.
The 3.6 per cent growth rate in industrial production seems more the norm than the high 6.3 achieved the previous month. In fact, the growth rate achieved in September is exactly the median growth rate over the period January-September. August seems to have been an aberration, registering a growth rate 2.6 percentage points higher than the median.
That said, some elements of the index certainly have fallen more drastically than others. Growth in the manufacturing sector, for example, plummeted to 2.6 per cent in September from a heady 6.6 per cent the previous month. However, this 2.6 per cent is low even compared to more ‘normal’ months, falling well below the 3.9 per cent median growth rate since January.
An exception The electricity sector, on the other hand, grew very strongly in September, coming in at 11.4 per cent, up from 5.6 per cent in August. This is the fastest growth the sector has seen since August 2014.
Notably, by usage, the capital goods sector slowed down considerably, coming in at 10.5 per cent in September compared to 21.4 per cent in August.
However, this could be more of a correction since the sector grew at 10.6 per cent in July.
Consumer goods, a measure of demand in the economy, also slowed to 0.6 per cent in September compared to 6 per cent in August. Growth in the Consumer Price Index, at 5 per cent in October, was the highest it has been since June, when it was 5.4 per cent.
The greatest increase can be seen in the food and beverages segment, which accelerated from 4.3 per cent in September to 5.3 per cent in October. Here, urban Indians felt the pinch more than rural Indians, although the rate of inflation quicken considerably for the latter as well.
Food inflation in urban India went from 3.8 per cent in September to 5.4 per cent in October. The same numbers are 4.5 per cent and 5.4 per cent for rural India.
Significantly, growth in the fuel and light segment of the CPI slowed for the third consecutive month to 5.3 per cent from 5.8 per cent two months ago. Inflation in clothing and footwear, at 5.6 per cent was at a multi-year low, lower than it has been for at least three and a half years.
Although CPI inflation has been accelerating lately, it is still within the Reserve Bank of India’s comfort zone of 6 per cent that it wanted to achieve by January 2016.
