Growth in manufacturing sector positive; economy firmly on growth path, says FM Arun Jaitley

Growth in manufacturing sector is a positive development and shows that the economy is firmly on the growth path, Finance Minister Arun Jaitley said on Wednesday.

He was commenting on the Index of Industrial Production (IIP) data, which showed that factory output grew at 3.8% in June, its fastest pace in four months.

"The growth is boosted by 4.6% increase in manufacturing, while mining and electricity sectors continue to need attention," Jaitley said.

"The growth in manufacturing lead by consumer durables and basic goods is a positive development for the economy. It shows that the economy is firmly on the growth path," he said.

IIP figures are consistent and need to be read with the growth in indirect tax receipts, the Finance Minister said.

Indirect tax revenue rose over 37% to over Rs 2.1 lakh crore in the April-July period this year on the back of higher excise duty collections.

Consumer goods have shown encouraging performance with output growth at 6.6%, Jaitley said, adding that consumer durables segment is even more encouraging at 16% while basic goods have also done appreciably well.

The Finance Minister also said: "It is especially notable that simultaneously inflation has declined to 3.8%, with food inflation being only 2.2%." Retail inflation rose by 3.7% year-on-year in July, slowest pace on record, helped by lower food prices of certain items including of vegetables, fruits and cereals.