With July factory output data showing significant uptick year-on-year, the Finance Ministry today said the manufacturing sector is slowly emerging as a leader of the industrial growth and the economy is improving steadily.
The industrial production and Balance of Payments (BoP), along with the GDP numbers of first quarter of 2015-16 point towards "steady improvement" in the economy, the ministry said in a release.
The Index of Industrial Production (IIP) grew at 4.2 per cent in July 2015 against just 0.9 per cent expansion in July 2014.
In the first four months of 2015-16, the manufacturing sector output has risen by 4 per cent in 2015-16 as compared to 2.8 per cent in the similar period of last fiscal.
"IIP at 4.2 per cent for July 2015 is the second successive month of over 4 per cent growth : manufacturing sector is slowly emerging as a leader of industrial growth increasing by 4.7 per cent," the Finance Ministry said.
Economic Affairs Secretary Shaktikanta Das said improvement in IIP data for July is in line with steady improvement in the economic growth.
"July IIP data consistent with steady improvement in GDP numbers," Das tweeted.
The IIP data for capital goods and manufacturing sectors are "noteworthy", Das tweeted further.
On the BoP data released by the RBI, the Ministry said BoP position continues to be comfortable on a sustainable basis with a lower current account deficit at 1.2 per cent of GDP in the first quarter of 2015-16 as against 1.6 per cent of GDP in April-June 2014-15.
"Our robust external sector has facilitated the lower depreciation of the Indian Rupee vis-a-vis currencies of other major EMEs (Emerging Market Economies) in the recent bouts of global financial volatility.
"The industrial production and BoP data released today, along with the Q1 2015-16 GDP numbers point towards steady improvement in the Indian economy," the Ministry said.
The GDP grew at 7 per cent in the April-June quarter, up from 6.7 per cent recorded in the year-ago period.
The Ministry further said capital goods has registered an impressive growth of 10.6 per cent, boosted by positive growth in production of commercial vehicles, transformers, cylinders, and aluminium conductors, among others.
Consumer durables goods sector has, like last month, recorded double digit growth of 11.4 per cent, boosted by growth in passenger cars and gems and jewellery.
The Indian industry said it indicates a revival in industrial activity and reiterated the demand for a rate cut by the RBI to provide a fillip to industrial growth.
Government has launched 'Make In India' campaign to increase domestic manufacturing which in turn would spur job creation.