Data on IIP and CPI point towards steady improvement in the Indian economy: Ministry of Finance

August 2015 IIP growth has registered an increase of more than 6% after 34 months

Ministry of Finance states that the data on the Index of Industrial Production (IIP) for August 2015 and Consumer Price Index (CPI)-New Series in September 2015 point towards steady improvement in the Indian economy.

The August 2015 IIP growth has registered an increase of more than 6% after 34 months. Cumulative IIP growth in the first five months in 2015-16 at 4.1% is better than the growth of 3% in the same period last year. Manufacturing sector growth at 6.9% in August 2015 has spearheaded industrial production. Double digit growth in capital goods (21.8%) and consumer durables (17%) in August 2015, helped of course by a favourable base effect, imply improvement in investment and consumption demand.

The year-on-year inflation as reflected in all India CPI (combined) increased to 4.4% in September 2015 from 3.7% in August 2015. However, it is low compared to 5.6% in September 2014. Inflation based on Consumer Food Price Index (CFPI) in September 2015 (3.9%) is lower than in September 2014 (6.2%).

Inflation continues to be low as per the latest available CPI numbers. Industrial growth data is a reflection of recovery in the economy, predominantly led by domestic demand as the external sector environment continues to be sluggish.

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