New Delhi, Sept. 28 -- India's industrial output grew at its fastest pace in several months in August, expanding 8 per cent year-on-year, government data showed on Monday, driven by a strong performance in manufacturing and electricity generation.

The Index of Industrial Production (IIP) growth accelerated to a revised 7.4 per cent in July, exceeding market expectations and pointing to sustained momentum in factory activity despite a sharp contraction in mining output.

Manufacturing output, which accounts for the bulk of the industrial index, rose 9 per cent in August, following a revised 8.2 per cent increase in July. Electricity generation jumped 12.3 per cent, while mining and quarrying output contracted 5.6 per cent.

"In a record performance, manufacturing sector recorded growth of 8 per cent or more in the last three consecutive months," the Statistics Ministry said.

The August data is the fifth monthly IIP release under India's new series, which uses producer prices to calculate factory output rather than wholesale prices used under the previous methodology.

Within manufacturing, 18 of 23 industry groups recorded year-on-year growth in August. Motor vehicles, electrical equipment and other transport equipment were among the biggest contributors, growing 25.2 per cent, 30.9 per cent and 25.3 per cent, respectively.

The production of consumer durables, including automobiles and mobile phones, rose 11.1 per cent, while consumer non-durables such as food products and toiletries grew 2.1 per cent, reversing a revised 0.8 per cent contraction in July.

Capital goods output rose 16.9 per cent, while intermediate goods increased 13.7 per cent and infrastructure and construction goods grew 6.4 per cent, indicating that the expansion extended beyond consumer-facing sectors.

For the first five months of the financial year, industrial output grew 6.7 per cent, compared with 4.2 per cent in the same period a year earlier. Economists said the data pointed to a broad-based strengthening in industrial activity during the second quarter, supported by domestic and export demand.

"IIP averaged 7.7 per cent in July and August, up from 6.2 per cent in the first quarter," said Dipti Deshpande, principal economist at Crisil. She said manufacturing remained the primary driver, followed by electricity, while capital goods, intermediate goods and consumer durables pointed to a broader-based expansion.

Published by HT Digital Content Services with permission from Millennium Post.