India's Industrial sector surges: August 2023 records impressive growth

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India's Industrial sector surges: August 2023 records impressive growth

India's Industrial sector surges: August 2023 records impressive growth

Industry News
Oct 16,23

Official data released revealed a significant surge in India's industrial production, with a remarkable growth rate of 10.3% on an annual basis in August, following a 5.7% increase in July.

India's Industrial sector surges: August 2023 records impressive growth

Official data released revealed a significant surge in India's industrial production, with a remarkable growth rate of 10.3% on an annual basis in August, following a 5.7% increase in July. This positive momentum marked a considerable turnaround from the 0.7% contraction witnessed in August 2022, as measured by the Index of Industrial Production (IIP).

The mining sector experienced a noteworthy recovery, expanding by 12.3% in August 2023 after a 3.9% contraction during the same period the previous year. Similarly, the manufacturing industry showcased resilience, with a growth of 9.3% in August 2023, rebounding from a 0.5% decline in August 2022. Furthermore, electricity production demonstrated robust growth, registering a 15.3% increase in August this year, compared to a modest 1.4% growth observed in the same month the previous year.

For the period of April-August 2023, the overall IIP exhibited a growth of 6.1%, a slight dip from the 7.7% growth recorded in the corresponding period of 2022-23.

Dipti Deshpande, Principal Economist at CRISIL, commented on India's industrial performance in August, noting the synchronicity between the 10.3% IIP growth and the S&P Global Purchasing Managers Index (PMI) for manufacturing, which reached a 3-month high of 58.6 in August, up from 57.7 in July. Deshpande highlighted the broad-based growth across various manufacturing sectors, attributing the rise to resilient domestic demand in consumer durables and non-durables. Export demand also played a pivotal role, bolstering IIP growth in petroleum products, machinery and equipment, textiles, and pharmaceuticals. The infrastructure and construction sectors experienced substantial growth, driven by robust government spending.

Looking ahead, Deshpande anticipated continued resilience in industrial activity, albeit at a slightly diminished pace. Challenges on the horizon included the impact of slowing major western economies in the latter half of 2023 and uncertainties stemming from uneven monsoon patterns affecting rural demand. Additionally, the transmission of rate hikes to lending rates could temper domestic demand in the coming months. Consequently, a cautious outlook led CRISIL to project a GDP growth rate of 6% for the fiscal year, down from the 7.2% recorded in the previous year.

Source: Indiatimes