Industrial output exceeds expectations

India's industrial production expanded in April at a much faster pace than anticipated, putting additional pressure on the Reserve Bank of India (RBI) to undertake more monetary tightening at its policy review next month. Growth was once again led by a strong performance by the crucial manufacturing segment, even as electricity turned out to be a laggard. Industrial output, as measured by the index of industrial production (IIP), stood at 17.6% in April as against an upwardly revised growth rate of 13.9% in March, data released by the Central Statistical Organisation (CSO) showed. The IIP reading beat consensus estimates of 13.5-14.5%. IIP growth stood at a mere 1.1% in April last year, as India's factories, mines and power utilities remained under pressure amid a sluggish global economy.



Manufacturing output grew by 19.4% in April as against 0.4% in the same month last year while mining production came in at 11.4% versus 3.4% in the corresponding period a year earlier, the CSO data showed. Meanwhile, the electricity sub-segment registered a growth rate of 6% in April compared to 6.7% in the same month last year.

Growth in Basic Goods category stood at 8.8% versus 4.4% a year ago, while Capital Goods output surged to a whopping 72.8% from a contraction of 5.9% in April 2009. Intermediate Goods output rose to 10.8% as against 7.9% in the same month last year. Consumer Goods output in April increased to 14.5% from a drop of 4.6% in the corresponding month a year earlier. Growth in Consumer Durables production jumped to 37% from 17.6% a year ago while that in Consumer Non-durables segment bounced to a growth of 6.6% versus a contraction of 10.5% in April 2009.