IIP numbers reflect steady uptick in economy: FinMin

New Delhi, October 13

With industrial production rising to a nearly three-year high, the Finance Ministry on Tuesday said the August IIP data point to a steady improvement in the Indian economy.

Economic Affairs Secretary Shaktikanta Das said the data provide base to the government to carry on reforms, including going ahead with the planned Goods and Services Tax (GST) and bankruptcy law.

The Index of Industrial Production (IIP) grew 6.4 per cent in August, highest since October 2012, and improved on 4.1 per cent expansion in the previous month.

At 4.4 per cent, retail inflation in September 2015 was lower than 5.6 per cent in same month last year.

"The data on IIP for August 2015 and Consumer Price Index (CPI) in September 2015 point towards steady improvement in the Indian economy," the Finance Ministry said in a statement.

The Ministry said inflation continues to be low as per the latest available CPI numbers. Industrial growth data is a reflection of recovery in the economy, predominantly led by domestic demand as the external sector environment continues to be sluggish, it added.

Das said: "Improved IIP numbers are encouraging. Reform measures will continue. GST and bankruptcy law are on top of reform agenda."

Although the government had planned to roll out GST, which is touted as the most comprehensive indirect tax reform since Independence, from April 1, 2016, it seems difficult given that the Constitution Amendment Bill is stuck in the Rajya Sabha where the ruling NDA does not have a majority.

The government, however, is going ahead with the preparatory work necessary for smooth implementation of the GST, which will subsume various levies like excise, service tax, sales tax, octroi, etc, and will ensure a single indirect tax regime for the entire country.

In a bid to improve the ease of doing business environment in the country, Finance Minister Arun Jaitley had in the Budget said the government would unveil a comprehensive Bankruptcy Code in the current fiscal.

The draft of bankruptcy law is almost complete and will be soon taken up in Parliament for approval. — PTI