Industrial output grows 7.1% in April

Industrial output, measured through Index of Industrial Production (IIP), increased 7.1% during April, shows government data released on Friday. This comes after the meagre 1.9% industrial growth seen in March.

The quick estimates for the index of industrial output stood at 135.1 for April 2022, compared to 126.1 seen during the corresponding month of last year.

The monthly index for mining output during April stood at 116, against 107.6 a year ago. Manufacturing also rebounded, with the index climbing to 132.5 from 124.6 in the year-ago period. The index for electricity production jumped to 194.5 from 174 last year and 191 in last month, as demand surged with the peak of summer.

As per use-based classification, the indices in April for primary goods stand at 139.3, for capital goods at 90.6, for intermediate goods at 150.2, and for infrastructure and construction goods at 149.4.

The indices for consumer durables and consumer non-durables stand at 112.1 and 140.4, respectively, for the month under review.

Along with the industrial output index for April, those for March 2022 have undergone the first revision and those for January 2022 have undergone final revision.

The National Statistical Office (NSO) also clarified that the growth rates over corresponding period of previous year are to be interpreted considering the unusual circumstances on account of Covid-19 pandemic since March 2020.

As per supply side data in the recently released gross domestic product (GDP) data for the quarter and fiscal ended March 2020, manufacturing shrank 0.2% during the March quarter. Meanwhile, mining and quarrying grew 6.7%, and electricity, gas, water supply and other utility services recorded growth of 4.5%.

Earlier today, Fitch Ratings revised its outlook on India's long-term foreign-currency issuer default rating (IDR) to stable, from negative. The global ratings agency has affirmed the IDR for the country at ‘BBB-‘.

In the rationale behind the outlook revision, Fitch says that the ratings action is based on the view that India's rapid economic recovery and easing financial sector weaknesses have mitigated downside risks to medium-term growth, despite near-term headwinds from the global commodity price shock. The agency expects this robust growth in comparison to peers will support credit metrics.

However, the uneven nature of the economic recovery and implementation risks for infrastructure spending and reforms can adversely affect this forecast, the ratings agency warns.