Revealing a deepening gloom in the country’s industrial sector, India’s industrial growth during the first five months of the current fiscal year was the worst in a decade, the Index of Industrial Production (IIP) has revealed.
The country’s industrial output in August fell to 0.7 per cent from a year ago, due the changes in capital goods and mining sector output.
Moreover, industrial growth so far this fiscal year has been even worse than during April-August 2009, immediately after the Lehman crisis, stated Livemint, citing the data provided.
A statement from Central Statistics Office read as: “The General Index for the month of August 2016 stands at 175.3, which is 0.7 per cent lower as compared to the level in the month of August 2015. The cumulative growth for the period April-August 2016 over the corresponding period of the previous year stands at (-) 0.3 per cent.”
A majority of the industry groups in the manufacturing sector have shown negative growth during the month of August 2016 as compared to the corresponding period in the last year.
According to the report, few significant items showing high negative growth during the current month include cable, rubber insulated; sugar machinery; woollen carpets; gems & jewellery; rice and HR sheets.
Aditi Nayar, Senior Economist in ICRA, was quoted by Bloomberg as saying: “The sharp year-on-year degrowth in capital goods exerted the chief drag on the IIP in August 2016.”
“However, the other components recorded a mild growth ranging from 0.1% to 3.6%. The growth of IIP excluding capital goods rose modestly to 2.5% in August 2016 from 2.0% in July 2016.”
This happens to be a worrying trend as the slump has been even worse than the 2008 financial crisis. Various signs like the production output, low demand for bank credit etc show that the manufacturing sector is dire straits despite what the government would like to claim under the leadership of PM Narendra Modi, and despite his refurbished schemes like Make in India.