India's industrial output grew at 4.5 percent as against a 0.2 percent growth rate year-on-year, as per the Index of Industrial Production (IIP) data released by the government on April 9.
"Industrial growth recorded a broad-based and sharper-than-expected pickup to a seven-month high 4.5 percent in February 2020, suggesting that some parts of the economy were on the path of a gradual revival prior to the escalation of the COVID-19 outbreak," said Aditi Nayar, Principal Economist, ICRA.
The manufacturing sector grew at 3.2 percent against a 1.5 percent month-on-month growth. Mining production grew 10 percent in February, against a 4.4 percent growth in January.
The growth of primary products was 7.4 percent in February against a growth of 1.8 percent in January. Capital goods production in February contracted 9.7 percent, against a contraction of 4.3 in January.
Consumer durables contracted 6.4 percent in February against a 4 percent contraction in January. Electricity production grew 8.1 percent in February against a 3.1 percent growth in January.
According to government data, India's gross domestic product (GDP) grew 4.7 percent in the October-December quarter of 2019-20. GDP growth came in at 5.6 percent in the corresponding quarter of 2018-19.
The government estimated that gross value added (GVA), which is GDP minus net taxes, grew at 4.5 percent in 2019-20 against 4.8 percent in Q2.
Government data projected that the manufacturing sector saw contraction of 0.2 percent in 2019-20 against -0.1 percent in Q2, while mining and quarrying would grow at 3.2 percent against 0.1 percent in the last quarter.
The Union Budget presented by Finance Minister Nirmala Sitharaman earlier this year projected a nominal GDP growth of 10 percent in the next fiscal, followed by 12.6 percent and 12.8 percent in FY22 and FY23, respectively.
"Even after the lockdown is lifted, demand for consumer discretionary items will take time to recover given the poor consumer sentiments in midst of job losses and pay cuts. Capital goods demand will also remain weak as businesses will be wary of capex in these uncertain times,” said Rajani Sinha, chief economist and head research, Knight Frank India.
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