Monday, 25 March 2019
Latest news
Main » India's 2016-17 factory output rises 5 per cent as manufacturing expands

India's 2016-17 factory output rises 5 per cent as manufacturing expands

13 May 2017
India's 2016-17 factory output rises 5 per cent as manufacturing expands

On Friday, India will release a new series of industrial output and wholesale inflation data, revising the base year to 2011/12 from 2004/05.

Consumer price inflation for the urban areas stood at 3.03 per cent in April 2017 against 3.96 per cent in March and 4.68 per cent in April 2016.

Further, it added that the number of source agencies reporting data for compilation of IIP in the new series will be 14 as compared to 15 earlier.

"However, in the second half it will be nearing 5 percent, which is in line with RBI's trajectory and, therefore, a rate cut is not anticipated".

Latest data released by CSO shows that electricity sector expanded 6.2 percent in March from 1.2 percent in February and 11.9 percent past year. However, it won't end the notorious fluctuation in certain IIP segments, particularly capital goods, because volatility is linked to the production pattern.

Explaining the rationale behind the revisions, the Government said that it is a regular exercise for periodical reviews and revisions of the base year of the macroeconomic indicators and is aimed at capturing the structural changes in the economy and improving the quality, coverage and representativeness of the indices.

On a cumulative basis, IIP grew by 5 per cent last fiscal as against 3.4 per cent in 2015-16.

The series would be less volatile, as compared to current series.

India's factory output or Index of Industrial Production (IIP) grew 2.7% in the month of March 2017 as against a drop of 1.2% in February 2017.

The March IIP data showed that electricity generation went up by 6.2 per cent, while that for mining rose by 9.7 per cent.

In the new series, manufacturing sector's weightage has been increased to 77.6 percent from 75.5 percent.

At a broad level, the new series has a total of 809 items in the manufacturing sector.

"There will be some impact on retail and wholesale inflation numbers, post rollout of the goods and services tax", said Statistics Secretary T C A Anant.

Coke and refined petroleum product manufacturing, which contributes 7.4 percent to the country's manufacturing, fell to 86.9 from 113.3 YoY. Ideally, they should move in the same range, as value addition at constant prices could address the price factors and broadly reflect physical growth.