India's industrial production grew 19.6% in May

India's industrial production grew by 19.6 per cent in May 2022, the National Statistical Office said.

According to the Index of Industrial Production (IIP) data released by the NSO, the industrial growth in May was 19.6 per cent, higher than the growth logged the previous month.

ICRA's Chief Economist Aditi Nayar said: "The sharp sequential increase in the industrial growth to the 12-month high 19.6 per cent in May 2022 was led by manufacturing and electricity, with a more modest uptick reported by mining activities relative to April 2022."

In terms of the use-based categories, all the sub-indices except consumer non-durables displayed a high double-digit growth in May 2022, she said.

On the other hand, consumer non-durables posted a weak 0.9 per cent YoY rise in May 2022, reflecting the limited disruption that was caused to production of this category by the second wave of Covid-19.

The IIP growth exceeded the core sector growth after a gap of eight months.

"Industrial growth printed in line with our forecast (19.0 per cent) in May 2022, expectedly spiking from the revised 6.7 per cent in April 2022 on the subdued base of the second wave of Covid 19 in India in May 2021," Nayar added.

In month-on-month terms, the sharpest rise was displayed by mining (3.5 per cent in May 2022), followed by electricity (2.8 per cent) and manufacturing (2.0 per cent).

The month-on-month uptick in the manufacturing index was favourable compared with the mild dip in the generation of GST e-way bills in May 2022 relative to the previous month.

Relative to the pre-Covid level of May 2019, the performance was decidedly mixed, with capital goods, consumer durables and consumer non-durables trailing, and primary goods, infrastructure goods and intermediate goods posting a rise in May 2022.

According to Vivek Rathi, Director, Research, Knight Frank India, the industrial production in May 2022 depicted a broad-based sequential improvement indicating at a resilient economic growth so far, unlike in the other major economies where the growth is faltering.

"To bring inflation under control and at the same time to harbour growth we expect the RBI to conclude its August 2022 policy meeting with a moderate 25-35 bps repo rate hike," Rathi added.