Driven by good performance of manufacturing and capital goods sectors, industrial production rose by 4.2 per cent in July against 0.9 per cent growth a year ago, but may not dampen the case for rate cut by RBI as it is still lower than growth recorded in the previous month.
According to the official data released today, the Index of Industrial Production (IIP) in July was a shade lower than the revised estimate of 4.36 per cent in June.
"July IIP data consistent with steady improvement in GDP numbers. Data for capital goods & manufacturing sectors are noteworthy," Economic Affairs Secretary Shaktikanta Das tweeted.
The IIP was at 3.5 per cent in April-July period against 3.6 per cent in the year-ago period, the Central Statistics Office (CSO) said in a release.
The main contributors to the growth were manufacturing and capital goods sector.
The manufacturing sector, which constitutes over 75 per cent of the index, grew by 4.7 per cent in July 2015 against a contraction of 0.3 per cent in the same month last year.The output of capital goods, a barometer of investment, grew at an impressive rate of 10.6 per cent against a contraction of 3 per cent in the same month last year.
Commenting on the data, Assocham President Rana Kapoor said, "With prices seemingly under control...RBI in its upcoming bi-monthly monetary policy must give due consideration to providing further fillip to the industrial growth and probably announce at least 25 bps rate cut."
RBI is scheduled to announce next monetary policy review on September 29.
"We hope that this growth and demand will pick up as we are nearing the festive season. There is a potential to take this growth to a higher level with the help of more supportive policies for stimulating domestic demand and exports." said FICCI president Jyotsna Suri.
In terms of industries, 12 out of 22 groups in the manufacturing sector showed positive growth in July.
The mining sector growth was at 1.3 per cent in July against 0.1 per cent in the same month last fiscal. Power generation growth slowed to 3.5 per cent in July compared to 11.4 per cent in the same month a year ago.
The consumer durables goods output expanded at 11.4 per cent in July compared to a contraction of 20.4 per cent in the month a year ago.
Overall consumer goods output rose by 1.3 per cent in July compared to a contraction of 5.9 per cent in the month a year ago.
During April-July the consumer goods output grew by 2.3 per cent compared to a decline in production by 3.8 per cent.
The consumer durables goods output grew at 11.4 per cent in July compared to a contraction of 20.4 per cent in the month a year ago. In April-July the segment grew by 5.8 per cent compared to a contraction of 12.3 per cent in the period last year.
The consumer non-durable goods output declined by 4.6 per cent in July compared to 5.2 per cent growth in the same month a year ago. During April-July, the output of these goods grew by 0.1 per cent compared to 2.3 per cent growth a year ago.
The basic goods output grew by 5.2 per cent in July, compared to 7 per cent growth a year ago, whereas the intermediate goods output grew by 1.5 per cent in the month under review compared to 2.9 per cent growth in the same period last year.