An unfavourable base effect (4.3% growth in March 2013) and the y-o-y decline in merchandise exports in March 2014 would have dampened manufacturing activity in the just-concluded month. However, the improved growth in production of two-wheelers (17% March 2014; 9% in Feb 2014; Source: Society of Indian Automobile Manufacturers or SIAM) and narrowing contraction in production of passenger vehicles (to 7% from 10%), would support manufacturing growth to some extent in March 2014.
The boost to the performance of the IIP provided by electricity generation would ease in March 2014, with tentative data released by the Central Electricity Authority (CEA) suggesting a modest 4% growth in electricity generation in that month. Additionally, heavy rainfall over parts of the country in the first fortnight of March 2014 is likely to have hampered mining activity. Overall, industrial growth in March 2014 and 2013-14 as a whole seems likely to record a contraction, inferior to the performance for March 2013 (3.5%) and 2012-13 (1.1%).