India’s industrial production sees sharp drop to worrisome levels

By : News Gateway / Factory Output / India /

After growing above 7 per cent for last four months, India’s industrial production (IIP) moderated at 4.4 per cent in March, dragged mainly by capital goods and low mining activities, official data revealed on Friday. As per the data released by the Central Statistics Office (CSO), on a year-on-year (YoY) basis, the index value remained unchanged.

IIP had edged higher by 4.4 per cent in May 2017. India’s industrial output grew at 7 per cent in February 2018. The previous low was in October, 2017, when IIP was at 1.8 per cent. The CSO’s data also showed that the sequential slowdown in factory output was mainly on account of lower production in the manufacturing sector. The manufacturing sector, which constitutes over 77 per cent of the index, grew at 4.4 per cent in March as compared to 3.3 per cent in the same month a year ago.

The mining Sector also continued to drag, with output decelerating to 2.8 per cent from 10.1 per cent in March 2017. Similarly, power generation too slowed down to 5.9 per cent as against 6.2 per cent in March 2017. Capital goods output saw a negative growth and declined by 1.8 per cent during March compared to a growth of 9.4 per cent last year. The output of the Infrastructure sector rose at moderated pace of 8.8 per cent in March 2018, while the output of primary goods rose at slower pace of 2.9 per cent and intermediate goods at 2.1 per cent. Consumer durables output showed an increase of 2.9 per cent as against decline of 0.6 per cent in March 2017.

On the other hand consumer non-durables segment showed an impressive growth of 10.9 per cent in March. In terms of industries, eleven out of the twenty three industry groups in the manufacturing sector have shown positive growth during the month of March 2018. Cumulative industrial production increased 4.3 per cent during the whole financial year ended March, 2018, compared to 4.6 per cent the previous year. “Though a favourable base effect has helped the numbers, other indicators like increase in demand for credit… point towards a confidence building macro picture,” D S Rawat, industry body Assocham’s Secretary General said.