The Industrial productions growth has been the fastest pace since 2010 when it went upto 10 per cent then. Though monthly spikes are not to be dealt too seriously, such positive ups boost hope to the battered economy. Overall April-October growth rose to 4.8 per cent, compared to 2.2 per cent in the previous year.
Manufacturing output jumped to 10.6 per cent, the mining sector increased to 4.7 per cent and electricity production went up to 9 per cent. With the parliament being stalled from passing important bills like the GST, these numbers can bring in some cheer to the Industry.
Though the lowering of the base rate and the festive season pushed the growth, several industries don’t feel that this can extend as there is no major pickup sign from the corporate end.
The standout performance was that of consumer durables at 42.2 per cent expansion. This highlights the strong urban demand. Consumer non-durables, which depends more on the rural economy, turned positive after many months of contraction.
Capital goods output was up 16.1 per cent, providing more evidence of a slight recovery in the investment cycle. In terms of sectors, 17 out of the 22 industry groups in manufacturing showed positive growth. The rise in manufacturing output was led by furniture, office machinery and communication equipment.
This reveals how closely the manufacturing industry is related to the services and the growth in services industry that triggers manufacturing. As a growing economy trying to fuel its developed nation dreams through manufacturing sector, the government and the industry should understand that no longer manufacturing can be a standalone sector and its demands are entwined with the services sector.
With old processes, outdated machinery, lagging technology and the yet to be updated labour law, India suffers in archaic period. Though large companies are adept to technology, the supporting systems, aka the small and medium industries need to be provided with similar facilities to upgrade and facilitate the changing demands and needs. In times to come, manufacturing and services would become hand in hand to facilitate better productivity.