Industrial output expanded 1.3 per cent in January compared with 0.7 per cent in December (revised estimate).

Economists said neither consumption demand nor investment are showing any traction, while the spike in commodity prices would further dampen demand.

The government should come out with more policy support to boost industrial recovery, the economists said.

Data released by the National Statistical Office showed manufacturing output growth at 1.1 per cent in January. Mining and electricity output registered 2.8 per cent and 0.9 per cent growth, respectively.

Among used-based industries, capital goods, which is a proxy for investment demand, contracted 1.4 per cent, while consumer durables contracted 3.3 per cent. Consumer non-durables expanded 2.1 per cent.

Industrial output clocked a growth of 13.7 per cent in April-January against a contraction of 12 per cent a year ago. Industrial production contracted 0.6 per cent in January 2021.

Rajani Sinha, chief economist, Knight Frank India, said “the recovery in January industrial production is uneven and is partly supported by the base effect. The momentum in manufacturing sector is positive for the economy”.

“The persisting contraction in the capital goods production is indicating a weakness in private investments. Consumption demand in the economy continues to remain weak as indicated by the continual contraction in consumer durables. This will be a concern for the RBI amidst inflation worries,” he said.

Sunil Kumar Sinha, principal economist, India Ratings and Research, said “four consecutive months of negative growth in consumer durables and capital goods is indicating that neither consumption demand nor the investment demand is showing traction”.

He said “high commodity prices especially of crude oil will further dampen the consumption demand and will also be a risk for the much awaited revival of the private corporate investment cycle”.

However, except capital and consumer non-durables all the other use based industrial segments show higher output levels compared with pre-Covid level.

“The pickup in growth of infrastructure/construction goods in January is promising after the contraction in construction gross value added in the third quarter of the fiscal,” Aditi Nayar, chief economist, Icra said.