Factory growth slows to 2% in April

The index of industrial production (IIP) grew less than expected, at 2% in April from a year earlier, government data showed on Wednesday.

Manufacturing, which constitutes about 76% of industrial production, grew 2.8% from a year earlier.

Capital goods production, a barometer for investments in the economy, grew an annual 1% from a year earlier, whereas intermediate goods grew 2.4% and consumer goods rose by 2.8% .

In March, the IIP recovered to 2.5% growth after a sluggish growth of 0.6% in February. The IIP growth stood at a decade low of 1% in 2012-13.

However, CPI inflation still remained elevated despite moderation at 9.31% in May from 9.39% in April.

This makes it even difficult for the Reserve Bank of India, which is set to review its monetary policy on June 17, to cut the policy rates.

Asia’s third-largest economy expanded at the weakest pace in a decade in the year ended March.

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