New Delhi: Pointing to shrinking manufacturing activities in the country, the overall industrial output contracted by 0.1 per cent in March against an expansion of 5.3 per cent a year ago, though mining and electricity output showed growth, government data released on Friday showed.
Factory output, as measured by the Index of Industrial Production (IIP), signalled a slowdown both in consumption and investment activities. “The manufacturing output with 78 per cent weightage in the IIP contracted 0.4 per cent in March, while mining and electricity output grew 0.8 per cent and 2.2 per cent, respectively,” said the Central Statistics Office (CSO).
IIP’s previous low was recorded in June 2017, or 21 months ago, when output shrank by 0.3 per cent.
Industrial production had expanded 5.3 per cent in March 2018. “For the entire 2018-19 fiscal, industrial output witnessed a 3.6 per cent growth as against 4.4 per cent in the previous fiscal,” CSO said.
Industrial production growth was 4.6 per cent and 3.3 per cent in 2016-17 and 2015-16, respectively.
IIP growth for February 2019 has been revised downwards to 0.07 per cent from 0.1 per cent earlier. Capital goods output declined by 8.7 per cent in March 2019 against 3.1 per cent contraction in March 2018. Power sector growth slowed to 2.2 per cent in March compared to 5.9 per cent a year ago. Mining sector growth also dropped to 0.8 per cent compared to 3.1 per cent expansion.
As per use-based classification, growth rates in March 2019 are 2.5 per cent in primary goods, (-) 2.5 per cent in intermediate goods and 6.4 per cent in infrastructure/ construction goods.
Similarly, consumer durables and consumer non-durables have recorded growth of (-) 5.1 per cent and 0.3 per cent, respectively.
In terms of industries, 12 out of the 23 industry groups in the manufacturing sector have shown negative growth compared to the year-ago period. With the economy slowing in Q4, the RBI has shifted its focus from inflationary concerns to sustaining the growth momentum from the February policy review. It cut the repo rate in February and in April.
The finance ministry in its monthly economic report for March released earlier this month said the slowdown in economic activity in 2018-19 is because of declining growth in private consumption, tepid increase in fixed investment and muted exports....