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New Delhi, November 11
In signs of continuing weakness in the economy, India’s factory output shrank to the lowest level in eight years as all three broad-based sectors of capital goods production, consumer durables, and infrastructure and construction goods contracted.
The Index of Industrial Production (IIP) fell 4.3% in September as compared to a contraction by 1.4% in August 2019 and a growth of 4.6% in factory output in the same month a year ago, data released by the Ministry of Statistics showed on Monday.
The second straight month of contraction has taken the IIP to its lowest level since it shrank by 5% in October 2011.
On a quarterly basis, the second quarter of 2019-20 fiscal (July-September) saw IIP contracting by 0.4% (Q1 3% expansion and 5.3% growth in Q2 FY19).
In September 2019, capital goods output dropped 20.7% from a year ago, while consumer durables fell 9.9%. Infrastructure and construction goods output fell 6.4%. Intermediate goods was the only use-based classification that grew 7% in September.
The contraction in IIP in September has dampened prospects of a quick recovery in economic growth after it slipped to a six-year low of 5 per cent in the April-June quarter this year.
Gross Domestic Product (GDP) data for July-September is due on November 29.
“IIP has been very volatile and the small momentum of a couple of months fizzles out soon,” said Devendra Kumar Pant, Chief Economist at India Ratings & Research. “The Indian economy is presently facing a structural growth slowdown originating from declining household savings rate, and low agricultural growth.” — PTI
INDEX OF INDUSTRIAL PRODUCTION FALLS 4.3%
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