New Delhi: With sluggish growth in mining and manufacturing sectors, the country’s industrial output grew by a mere 2 per cent in June, a four-month low, while the expansion was 7 per cent in June last year, according to government data released on Friday. The growth rate stood at 4.6 per cent in May 2019.
Factory output, which is measured by the Index of Industrial Production (IIP), is the closest monitoring index that measures the economic activity.
As per the Central Statistical Organisation data, there was a slowdown in the manufacturing sector, which grew at 1.2 per cent in June compared to 6.9 per cent a year ago. Mining sector growth also dropped to 1.6 per cent in June from 6.5 per cent.
The expansion in power generation sector stood at 8.2 per cent compared to 8.5 per cent earlier.
“The growth rate of capital goods, infrastructure and construction goods and consumer durables has remained negative in the month of June,” the CSO said.
Capital goods segment, which is a barometer of investment, saw a contraction of 6.5 per cent in June compared to 9.7 per cent growth a year ago. Similarly, infrastructure and construction goods grew at -1.8 per cent and consumer durables at -5.5 per cent June.
For the April-June period, the eight infrastructure sectors averaged 3.6 per cent growth, down from 5.1 per cent growth a year ago, while exports contracted 1.7 per cent during the same period.
The previous low in IIP growth was in February 2019, when it had inched up 0.2 per cent.
Factory output had contracted in March 2019, the first time in 21 months, showing a decline in both investment and consumption. Even growth in core industries of steel, electricity, coal and cement is falling or has been stagnant in recent quarters.
The country’s GDP growth for the March quarter slowed to a five-year low of 5.8 per cent from 6.6 per cent in the December quarter.