India's factory output rises 3.1% in April

India’s factory output grew 3.1 percent in April from 2.7 percent in March, amid revival signs. However, the rebased data set may partly explain the expansion.

Last month, the government announced a new series, shifting the base year to 2011-12 from 2004-05, changing the weights and adding new items to reflect current consumption patterns. The change in baseline for the IIP, made by the Central Statistics Office (CSO) last month was much needed, in order to map economic activities more accurately and project realistic data.

Factory output measured by the index of industrial production (IIP) is the closest approximation for measuring economic activity in the country’s business landscape.

In the new series, manufacturing sector’s weightage has been increased to 77.6 percent from 75.5 percent, with electricity's share in the index witnessing a decline to 7.9 percent from 10.3 percent. The data also included renewable energy sources. Infrastructure or construction goods were the new addition in the index, with a substantial rise in the number of consumer durables and non-durables.

Manufacturing sector’s growth continued to remain tepid. It grew 2.6 percent in April compared with 6.2 percent in March and 5.5 percent in the same period last year.

Infrastructure or construction goods grew 5.8 percent in April as compared with a sluggish 0.8 percent jump last year. Similarly, consumer non-durables jumped 8.3 percent in April from a near-flat growth of 0.1 percent last year.

Consumer durables saw a negative growth at (-) 6.0 percent in April, compared with 13.8 percent growth during the same period last year.
Mining production also witnessed slight slowdown to a 4.2 percent growth in April from to a robust growth of 9.7 percent in March.

Electricity grew (-) 5.4 percent in April as against 14.4 percent in same period last year.