data released by national statistics office ,NSO) showed on Friday that the Index of Industrial Production (IIP) rose 1.3% annually in January, from an upward revision of 0.7% in December. The sector had contracted by 0.6% in January 2020-21.
In the April-January period of the current fiscal, production growth stood at 13.7 per cent, as against 12% in the same period a year ago.
The manufacturing sector grew 1.1% in January, compared to a contraction of 0.9 percent. The capital goods sector, which is seen as a key gauge of investment activity, contracted 1.4% during the month, compared to a decline of 9% in January 2021. The consumer durables sector declined by 3.3% compared to a contraction of 0.1%. year ago month.
“Two things can be concluded. Firstly, the suppressed demand seen in the festival months has dried up and omicron Could not be a factor as manufacturing was not affected by the restrictions. Second, investment is still low because companies are operating with surplus capacity and do not need to invest in capital. However, the decline in auto production may be directed more due to supply constraints than demand,” said Madan SabnavisChief Economist A.T. Bank Of Baroda,