India recorded its industrial growth at 3.2% in October instead of 2.9% as expected by ICRA. The credit to this boost could be given to the festive season that brought a boom in the primary market.
The durable sector, on the other hand, showed a contraction due to the supply shortages. Index of Industrial Production (IIP) rose by 4.8%, where GST e-bills recorded the highest in the month at 8.2%.
The capital goods market recorded output levels higher than the pre-COVID-19 level. The electricity and port traffic demands deteriorated in November. The data of ICRA also highlighted that output of the manufacturing sector rose by 2% in October and the mining output surged by 11.4%.
“Industrial growth printed at a stable yet tepid 3.2% in October 2021 (ICRA exp: 2.9%), with the festive season boost being negated by the supply side issues afflicting the auto sector, as well as a higher base. The disaggregated data does not provide convincing signals of the recovery becoming durable and broad-basing further, with capital goods and consumer durables reporting a YoY contraction in October 2021,” said Aditi Nayar, Chief Economist, ICRA Limited.