India’s economy is strengthening even amidst global uncertainty. An impressive 5.1 percent growth has been recorded in the country’s industrial production (IIP) during the month of May. In April this figure was at 4.9 percent. The increasing activities in factories and the huge surge in electricity production have given new energy to this development. The increasing production in factories is an indication that the demand in the market is completely intact. This increase in production makes the wheels of the economy turn faster, thereby creating new employment and business opportunities in the future.
Excellent performance of manufacturing sector
The manufacturing sector, which has a huge weightage of 76 percent in the IIP index, is proving to be the backbone of the economy. This sector has registered a strong growth of 5.5 percent in May. The highest jump of 20.8 percent has been seen in the manufacturing of electrical equipment. Apart from this, a tremendous growth of 15.5 percent has been recorded in metal products, 14.5 percent in motor vehicles and 11.4 percent in computer-electronics sector. This expansion in the heavy machinery and capital goods sectors testifies to the fact that investment demand and infrastructure spending in the country remains at a high level.
Huge demand for power generation in scorching heat
The scorching heat of the month of May also gave a big support to the industrial figures. Electricity and gas supply emerged as the biggest drivers of overall growth this month, witnessing a massive growth of 9.9 percent. If we talk only about electricity production, it increased by 11.1 percent. In fact, in summer, the demand for electricity is at its peak due to the use of AC, cooler and other appliances, the direct effect of which has come out in the form of these spectacular figures.
Purchasing power increased in urban areas
There has been a huge jump of 12.9 percent in the production of investment-related capital goods (machinery etc.), which was 9.5 percent in the same period a year ago. Similarly, consumer durables (like TVs, refrigerators, vehicles) have increased by 7.2 percent. This strength shows that people in cities have money in their hands and they are spending it freely on things of their choice. However, the growth of items of daily use (consumer non-durables) was 3.6 percent.
Slight slowdown in mining sector
While on one hand many parts of the economy are running fast, on the other hand the mining sector seems to be lagging a little behind. This sector shrank by 1.6 percent in May. The mining sector remained under pressure due to low production of crude oil, gas and non-metallic minerals. Along with this, some other consumer related sectors like clothing production (-8.8%) and refined petroleum (-4.7%) have also witnessed a slowdown.
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