India's 2016-17 factory output rises as manufacturing expands

Consumer inflation is expected to have eased to a three-month low in April helped by smaller rises in food prices

Consumer inflation is expected to have eased to a three-month low in April helped by smaller rises in food prices

While WPI inflation slipped to 3.85% in April, the industrial production went up to 2.7% in March, from 1.9% in the previous month, according to the new series with 2011-12 base year.

India's industrial output grew at a robust 2.7 percent in March from 1.9 percent in February, mainly due to a revision in the base year to 2011-12, replacing the current base of 2004-05.

Consumer inflation in India is expected to have eased to a three-month low in April, helped by smaller rises in food prices, but with a summer rebound in prospect the Reserve Bank of India (RBI) is likely to keep interest rates on hold.

Consumer price inflation for the urban areas stood at 3.03 per cent in April 2017 against 3.96 per cent in March and 4.68 per cent in April 2016.

As per the data based on the new base year, the manufacturing sector output slowed to 1.2 per cent in March, from 5 per cent in the same month of the previous fiscal.

However, inflation on the Consumer Price Index or CPI, which has already been revised to a new series, declined to 2.99 per cent in April as against 3.81 per cent in the previous month.

A value exceeding 100 denotes a growth in the IIP compared to the base year of 2015. However, it won't end the notorious fluctuation in certain IIP segments, particularly capital goods, because volatility is linked to the production pattern.

The ministry also said in a statement that in order to reflect the increasing significance of electricity generation from renewable sources, it has been made a decision to include the data in the new series.

The largest growth within 1Q17 came during March, when the IIP increased to an all-time high of 109.5 ahead of the April festive season, beating 107.8 recorded during March 2016. Within this, the mining sector grew 9.7% in March per the new series versus 7.9% as per the old data.

The new series now has 809 items in the manufacturing sector in the item basket (405 item groups).

The WPI and IIP data based on new series were not statistically comparable with the earlier data based on 2004-05 base year, T.C.A. Anant, India's chief statistician, told reporters. Inflation in manufactured products was steady at 3%. New item basket in manufactured products reflects changed structure of the economy.

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