Industrial output shows big jump, up 7.8% in June

The industrial production rose at its fastest pace in a year as stimulus packages and easy monetary policy take their effect. The index of industrial production rose 7.8 per cent in June from a year earlier, after growing a revised 2.2 per cent in May.

The big rise in June output was powered by a 15 per cent jump in mining growth as compared to just 0.1 per cent a year earlier. June manufacturing growth came in at 7.3 per cent vs 6.1 per cent a year earlier. Electricity production also grew at 8 per cent while consumer goods production was up 4 per cent.

The big jump in the output has however raised questions whether it can be sustained. Mridul Saggar, chief economist, Kotak Securities, said, “It is definitely a very positive number. But we need to watch out if growth of this order can be sustained. The number on the manufacturing front is a big surprise.”