India’s Power Demand Rises For First Time In Six Months
India’s electricity demand rose for the first time in six months, suggesting a recovery in industrial production.
Electricity demand from distribution utilities rose 3.6 percent year-on-year in January, according to a report by Kotak Institutional Equities, which gathered its data from the Central Electricity Authority. This marks a recovery from the slump which started in August, when power requirement dropped for the first time in more than two years.
The increase in demand was led by Maharashtra (8 percent), Andhra Pradesh (7.4 percent and Karnataka (7.7 percent)—all areas of significant industrial and commercial activity, said Debasish Mishra, partner at Deloitte.
“This could mean a few things. First, it could signify green shoots and an early sign of recovery in industrial activity. Secondly, it could partly be because residential demand has gone up in states like Maharashtra because of rising temperatures,” Mishra told BloombergQuint. “This could be linked to IIP. Maybe we’ll see an increase in industrial output for the month.”
This isn’t the only green shoot for India’s economy in January. The dial on a gauge measuring so-called animal spirits showed activity accelerating for the second straight month, with most of the eight high-frequency indicators tracked by Bloomberg News holding their ground last month.
The data points may give policy makers respite after both the Reserve Bank of India and the government unveiled a series of measures to boost investment, manufacturing and liquidity in the Indian economy after gross domestic product growth fell to 4.5 percent in the quarter ended September.
A poll of 42 economists by Bloomberg showed that India’s GDP growth may rise for the first time in six quarters.