Factory data for July not to be revised

Factory data for July not to be revised

New Delhi: The data for industrial output in July will not be revised significantly downward, industry secretary R.P. Singh said on Tuesday.

Factory output for July jumped 13.8%, much higher than expected, on a 63% surge in capital goods production, sparking some market talk that the data may be inaccurate and in line for a major revision.

“No, it will not," Singh told Reuters when asked whether the 13.8% figure could be revised downwards significantly, adding the government knew there was a significant industrial capacity build-up.

A note by Kotak Institutional Equities on Monday raised the prospect of potentially erroneous IIP data.

“IIP (industrial production) up again, but seems a statistical puzzle. July IIP at 13.8% versus our consensus and that of the market of near 7.8% surprised us," the note said.

“The upside came mostly from capital goods, which grew 63% in July. We think this data is noisy and possibly erroneous as we get a lower 22% growth."

The high rate of industrial growth in July, and headline inflation WPI well above the Reserve Bank of India’s comfort zone, has prompted many economists to expect a rate rise at the bank’s policy review on Thursday.