Factory output up 2.7 pct in January; manufacturing output at 2.3 pct

Amid signs of demonetisation and restricted cash access hurting the production activity in thousands of factories, India's industrial output grew 2.7 percent in January from a (-) 0.4 percent in December and (-) 1.5 percent in January last year.

The manufacturing sector, which accounts for more than 75 percent of the index of industrial production (IIP), grew 2.3 percent in January compared to (-) two percent in December and (-) three percent in January last year.

However, the latest factory output data came barely ten days after government forecast India's real or inflation-adjusted gross domestic product (GDP) will likely to grow at 7.1 percent in 2016-17, running counter to analyst projections that had forecast a sharp deceleration in the broader economy because of demonetisation.

The factory output measured by the IIP is the closest approximation for measuring economic activity in the country's business landscape.

Also, the cumulative growth for the period April-January, 2016-17 over the corresponding period of the previous year stands at 0.6 percent, compared to 2.7 percent in the previous year.

Consumer durables output stood a 2.9 percent in January from (-) 10.3 percent in the previous month.

The mining production growth grew to 5.3 percent during January, compared to December's 5.2 percent jump and 1.5 percent growth in January last year.