The poor show in the month of September was led by capital goods sector mainly which contracted at 6.8 per cent versus a contraction of 2 per cent in August. Capital Goods sector has mainly been hit by falling demand for the consumer durables amid rising interest rates.
Mining sector emerged as the bright spot in IIP as it grew 3.3 per cent during the month, after contracting for 10 consecutive months. The manufacturing sector grew at 0.6 per cent versus a contraction of 0.1 per cent in August.
The development comes soon after planning commission deputy chairman Montek Singh Ahluwalia said that India would get back to 8 per cent growth trajectory in two years as economy has already started bottoming out.
Interestingly, the IIP data came a day after government released external trade numbers which showed that exports of India grew at 13 per cent, implying that the demand is reviving in other countries at a faster pace than in India.
Dion Global Solutions Ltd.