Unfavourable base effect of high 8% growth in June 2016 also magnified the impact.However, independent economists expect industrial output to rise with GST kicking with 15% rise in sales of passenger vehicles in July pointing to return to normalcy. Reflecting sluggish urban demand, consumer durables output fell 2.1% while capital goods production, an indicator of investment, fell 6.8%. Consumer non-durables production rose 4.9%. Some government activity in infra could be the main driving force,” CARE Ratings said. Mining, power generation and infrastructure/construction goods too recorded poor performance.Madan Sabnavis, chief economist at CARE Ratings, said that the restocking of inventories will take place that is likely to boost industrial output and help industrial output grow at around 4-5% in 2017-18.

Source: Economic Times August 11, 2017 13:38 UTC