Leader of Industrial Growth Increasing by 4.7 per cent:Manufacturing Sector has Increased by 4.0 per cent in 2015-16 as Compared to 2.8 per cent in 2014-15: BoP Position Continues to be Comfortable on a Sustainable Basis with a Lower Current Account Deficit at 1.2 per cent of GDP in Q1 Of 2015-16 as Against 1.6 per cent of GDP in Q1 Of 2014-15, Pointing a Steady Improvement in the Indian Economy.

The growth in Index of Industrial Production (IIP) at 4.2 per cent for July 2015 is the second successive month of over 4.0 per cent growth during the current financial year. Manufacturing sector is slowly emerging as a leader of industrial growth increasing by 4.7 per cent. In the first four months, manufacturing sector has increased by 4.0 per cent in 2015-16 as compared to 2.8 per cent in 2014-15. Capital goods has registered an impressive growth of 10.6 per cent, boosted by positive growth in production of commercial vehicles, transformers, cylinders, aluminium conductors etc.  Consumer durables goods sector has, like last month, recorded double digit growth of 11.4 per cent, boosted by growth in passenger cars and gems and jewellery.  

As per Balance of Payments (BoP) data for Q1 of 2015-16 released by the RBI today, the BoP position continues to be comfortable on a sustainable basis with a lower current account deficit at 1.2 per cent of GDP in Q1 of 2015-16 as against 1.6 per cent of GDP in Q1 of 2014-15. Our robust external sector has facilitated the lower depreciation of the IndianRupee vis. a. vis currencies of other major EMEs in the recent bouts of global financial volatility.  The industrial production and BoP data released today, along with the Q1 2015-16 GDP numbers point towards steady improvement in the Indian economy.

Industrial production growth leads economic improvement as manufacturing and external balance strengthen, supporting currency stability. IIP growth at 4.2 per cent for July 2015 is the second successive month above four per cent, led by manufacturing which rose 4.7 per cent and 4.0 per cent year to date versus 2.8 per cent previously; capital goods and consumer durables showed notable gains. BoP for Q1 2015 16 shows a narrower current account deficit at 1.2 per cent of GDP versus 1.6 per cent a year earlier, supporting relative currency stability and reflecting steady macroeconomic improvement.