IIP grows 8.2% in October, Chidambaram sees green shoots
New Delhi: Encouraged by the 8.2 percent growth in industrial output in October, Finance Minister P Chidambaram on Wednesday said that it reflected emergence of "green shoots" in the economy.
"I am very encouraged by the indications of the green shoots in economy in terms of production. IIP figures are very encouraging", he told reporters here.
The factory output, as measured by the Index of Industrial Production (IIP), soared to 16-month high of 8.2 percent in October on good performance of the manufacturing, power sector and higher output of capital as well as consumer goods, indicating sudden recovery in the economy. It had contracted by 5 percent in October in the previous fiscal.
So far this fiscal, Chidambaram said, IIP had shown positive growth only in May at 2.5 percent and August at 2.3 percent.
"Let's see what the next four months bring us. Investments are taking place, capacity is being created and consumption is happening in consumer durables and non-durables", the Minister said.
He said that intermediate goods, a good indicator of future production, grew by 9.4 percent.
"Capital goods output at 7.5 percent is very encouraging. Since April it was in negative. This is the first month of positive growth", he added.
The capital goods output, it may be recalled, dipped by a whooping 26.5 percent in October 2011.
The manufacturing sector, which constitutes over 75 percent of the index, grew by robust 9.6 percent in October, as against a contraction of 6 percent in same month last year.