IIP growth at 2% for April – Reactions

The Index of Industrial Production (IIP) grew at 2% in April, compared to 2.5% in March.

Following are comments from analysts and industry bodies.


“While industrial production has shown some signs of improvement, the growth triggers which would pave the way for a sustained recovery have yet to become apparent,” said Chandrajit Banerjee, Director General, CII. CII is India’s largest association of companies.

“The negative growth of mining sector continues to cause concern even as most lead indicators such as capital goods, intermediate goods, power production are performing below potential. What is also worrisome is that the consumer durables sector continues to be in the red as high interest rate is pulling down demand”

There is an urgent need to kickstart the investment cycle by speeding up clearances by the Cabinet Committee on investment and addressing supply side bottlenecks in infrastructure, CII siad. “What is also required is infusing competition in the mining sector, improving coal supply position to the power sector, accelerating disinvestment and putting in place a conducive policy for attracting FDI inflows. CII also looks forward to an accommodative monetary policy announcement on 17th June to stimulate investment,” said Banerjee.

Angel Broking

“Put together, the data on IIP and CPI inflation is disappointing. The IIP reported a muted 2% growth despite a low base effect playing out during the month,” said Bhupali Gursale (Economist-Angel Broking).

“This can be mainly attributed to the weak production in capital goods and a contraction in consumer durables. The trend of an uptick in CPI inflation has been reversed as expected, but it still remains high owing to food inflation. So despite the recent moderation in WPI inflation, elevated retail inflation coupled with sharp INR depreciation and expectation of a higher trade deficit during the month of May has largely dampened hope of a rate cut by the RBI in its June policy meeting.”