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  3. IIP contracts by 1.9 percent in October, dragged by manufacturing

IIP contracts by 1.9 percent in October, dragged by manufacturing

12 Dec 2016 Evaluate

India’s industrial production showed steep decline in the month of October due to sharp drag in capital goods and weak performance of overall manufacturing, indicating that the situation could be worse in November when the impact of demonetization will be visible. Country’s Index of industrial production (IIP) declined to a three-month low of (-) 1.9 percent in October, compared to rise of 0.7 percent in September and a growth of 9.9 percent in October last year.

As per the quick estimates data released by the Central Statistics Office of the Ministry of Statistics and Programme Implementation, the general Index for the month of October 2016 stood at 178.0, 1.9 percent lower as compared to the level in the month of October 2015. The cumulative growth for the period April-October 2016 over the corresponding period of the previous year stood at (-) 0.3 percent.

The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of October 2016 stood at 129.4, 183.6 and 203.9 respectively, with the corresponding growth rates of (-) 1.1 percent,(-) 2.4 percent and 1.1 percent as compared to October 2015. The cumulative growth in these three sectors during April-October 2016 over the corresponding period of 2015 was (-) 0.2 percent, (-) 1.0 percent and 4.6 percent respectively.

Manufacturing, which is the main segment, constituting over 75% of IIP fell by 2.4%. In terms of industries, twelve out of the twenty two industry groups in the manufacturing sector showed negative growth during the month of October 2016 as compared to the corresponding month of the previous year.

As per Use-based classification, the growth rates in October 2016 over October 2015 were 4.1 percent in Basic goods, (-) 25.9 percent in Capital goods and 2.9 percent in Intermediate goods.  The Consumer durables and Consumer non-durables recorded growth of 0.2 percent and (-) 3.0 percent respectively, with the overall growth in Consumer goods being (-) 1.6 percent.

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