India's industrial production rose 19.6 percent in May, mainly due to strong performance by the manufacturing, power, and mining sectors, according to official data released on July 12.

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As per the data released by the ministry of statistics and programme implementation, the manufacturing sector expanded by 20.6 percent compared to a growth of 32.1 percent recorded in the year-ago period.

Power sector showed a growth of 23.5 percent as against 7.5 percent a year ago, while the mining sector witnessed an expansion of 10.9 percent in May 2022 compared to a growth of 23.6 percent last year.

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Capital goods output, which is a barometer of investment, showed a growth of 54 percent in May 2022 against a jump of 74.9 percent in the year-ago month. The consumer durables segment grew by 58.5 percent against a growth of 80.4 percent a year ago.

The primary goods segment, which accounts for nearly 34 percent of the index, expanded by 17.7 percent in May compared to 15.8 percent growth a year ago. The consumer non-durable segment grew by 0.9 percent in May compared to a growth of 0.2 percent in the same month a year ago.

IIP growth was recorded at 27.6 percent in May last year, mainly due to the low-base effect. The IIP had grown 7.1 percent in April this year after remaining subdued for the preceding seven months.

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Industrial production had grown by 13 percent in August last year. Thereafter, the IIP growth remained below 4.4 percent (in September) and touched the lowest level of 1 percent in November as well as December last year.

The ministry said the growth rates over the corresponding period of the previous year are to be interpreted considering the unusual circumstances on account of the COVID-19 pandemic since March 2020. The IIP for the month of April has been revised to 6.7 percent from provisional estimates of 7.1 percent released in June.

Aditi Nayar, Chief Economist at ICRA said the industrial growth printed in line with our forecast (19.0%) in May 2022, expectedly spiking from the revised 6.7% in April 2022 on the subdued base of the second wave of Covid 19 in India in May 2021.

"The sharp sequential increase in the industrial growth to the 12-month high 19.6 percent in May 2022 was led by manufacturing and electricity, with a more modest uptick reported by mining activities relative to April 2022. In terms of the use-based categories, all the sub-indices except consumer non-durables displayed a high double-digit growth in May 2022," Nayar said.

"In contrast, consumer non-durables posted a weak 0.9 percent YoY rise in May 2022, reflecting the limited disruption that was caused to the production of this category by the second wave of Covid 19. The IIP growth exceeded the core sector growth after a gap of eight months," he said.

Further, Nayar said, "In month-on-month terms, the sharpest rise was displayed by mining (3.5 percent in May 2022), followed by electricity (2.8 percent) and manufacturing (2.0 percent ). The month-on-month uptick in the manufacturing index was favourable compared with the mild dip in the generation of GST e-way bills in May 2022 relative to the previous month."

First Published:Jul 12, 2022 5:45 PM IST