Industrial production contracts by 0.8% in April; its first decline in 3 months

New Delhi: Pulled down by the poor show by manufacturing and capital goods sectors, the industrial production shrank by 0.8% in April in its first decline in three months. Factory output measured in terms of the Index of Industrial Production (IIP) had expanded by 3% in April last year, the data released by Central Statistics Office (CSO) on Friday showed.

Disappointing data may add to the clamour for rate cut by the Reserve Bank of India. The IIP had registered a growth of about 2% in February this year. The provisional estimates of 0.1% growth in March this year was revised slightly upwards to 0.3%. The IIP declined by 1.6% this January.

Manufacturing sector which constitutes over 75% of the index, contracted by 3.1% in April this year compared to a growth of 3.9% in same month last year.

Similarly the capital goods output, which is a barometer of investment, declined sharply by 24.9% in April compared to a growth of 5.5% during the same month last year.

Showing lower demand, overall consumer goods output dipped by 1.2% in month under review as against a growth of 2.8% year ago. The consumer non-durable segment showed decline in output by 9.7% compared to a growth of 3.7% year ago.

However, the consumer durable sector showed an uptrend by recording a growth of 11.8%, up from 1.3% a year ago. On the positive side, power generation recorded a growth of 14.6% as against a marginally decline of 0.5% a year ago.

Mining sector, showed some improvement recording a growth of 1.4% as against a contraction of 0.6% a year ago. Overall, 9 of the 22 industry groups in manufacturing sector showed negative growth in April 2016 as compared to year ago period.