. Electricity generation crashed by 12.2% in the month, recording its worst monthly fall in the current index of industrial production (IIP) series.
Care Ratings has revised its growth estimate for FY20 power generation to 1-3% from its earlier outlook of 5-6% on the back of slowdown across the manufacturing industry.
“The overall growth in demand for power has fallen to its lowest level in the last decade mainly on account of slowdown in industrial activity,” the agency noted.
As FE reported recently, while the usually rising power demand has fallen since August 2019, the drop has been sharper in the industrialised states of Maharashtra and Gujarat. This controverts the government’s attribution of the historic fall in electricity consumption in the country during recent months to ‘extended monsoon’ and the consequent “reduction in demand in agriculture sector and the reduction in cooling requirement in the domestic and commercial sectors”.
“Power-intensive industries like automobile and cement have witnessed broad-based slowdown during the year, which has impacted the demand for power,” CARE Ratings said.
India’s industrial production shrank 3.8% in October, recording its third straight monthly contraction. Electricity generation crashed by 12.2% in the month, recording its worst monthly fall in the current index of industrial production (IIP) series. While the rate of growth of power consumption had been falling since early this financial year, a phase of contraction began in August.