After contracting for three consecutive months, Index of Industrial Production (IIP) grew at 1.8 per cent in November on the back of improving manufacturing sector. The IIP growth in November 2018 was at 0.2 per cent.

According to the National Statistical Office (NSO) data, the growth in the manufacturing sector was 2.7 per cent as against a contraction of 0.7 per cent in the same month last year, reported.

The IIP growth during April-November came in at 0.6 per cent, down from 5 per cent in the same period of 2018-19.

As per the NSO data, 13 out of the 23 industry groups in the manufacturing sector showed positive growth during November 2019 as compared to the corresponding month of the previous year.

Here’s how economists reacted to the IIP data.

Deepthi Mathew, Economist, Geojit Financial Services
It is a good sign for the economy as IIP turned positive after three months of contraction. From the consumption point of view, it is welcoming that the consumer non-durables has turned positive. However, consumer durables are still in the negative territory, contracting for the last six months.

Sunil Kumar Sinha, Principal Economist, India Ratings
We believe turnaround in factory output growth from degrowth to growth though is a welcome sign, it still cannot be interpreted as some kind of a green shoot on the industrial front as a number of key use-based sectors such as consumer durables, capital goods, basic goods and infrastructure goods are still showing degrowth. Unless and until the majority of the use-based sectors show positive growth on a sustained basis, it would be difficult to believe that Indian industrial sector has come out of the woods.

Rumki Majumdar, Economist, Deloitte India
The latest IIP numbers come as a relief to the market and policymakers, as the activity in the industry sector showed some traction. On a month-on-month basis, growth has been broad-based with capital and durable goods showing considerable improvement. Relative to the previous year, growth in manufacturing has been impressive, although it could not build on the past month’s growth momentum.

Karan Mehrishi, Lead Economist, Acuité Ratings
Minor recovery in the IIP is a function of a favourable base effect, which will continue to benefit until the end of the financial year. On these lines, manufacturing, which was contracting continuously for the previous three months has received a fillip from the contraction in November 2018 (base year). Segments without such benefit are maintaining their negative outlook, baring consumer non-durables (use based).

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