MUMBAI: India’s factory output surged 16.7 percent in January from a year earlier — its fourth month of double-digit expansion — as government measures to stimulate demand give way to a deepening economic rebound, official figures showed Friday.
The Ministry of Statistics also revised up its industrial production growth figure for December, from 16.8 percent to 17.6 percent, which is the sharpest monthly rise in at least five years.
Manufacturing output rose 17.9 percent in January from a year earlier, with 14 of 17 industry groups showing gains, the government said.
Transport equipment and parts showed the largest growth, surging 57.6 percent from a year earlier. Vehicle sales in India have been on the rise for 13 months, part of an accelerating auto boom driven by government stimulus, rising incomes, pent up demand, and buying in advance of tax hikes.
Capital goods output rose 56.2 percent and consumer durables production rose 31.6 percent in January.
Macquarie Securities economist Rajeev Malik cautioned in a research note this week that India’s recovery, though stronger than expected, remains somewhat restricted to sectors that have benefited from stimulus measures which are unlikely to be repeated.
“Away from the glossy headline IP growth, the underlying recovery is still narrowly based, although it will broaden and become more entrenched in the coming months,” he said.
He predicts the central bank will hike policy rates by one percentage point at its April meeting.


