The index of industrial production (IIP) grew at 2 per cent in January, compared to a contraction of 0.3 per cent in the previous month.
India’s industrial output marginally expanded in the month of January after contracting in four out five months since August 2019. The index of industrial production (IIP) grew at 2 per cent in January, compared to a contraction of 0.3 per cent in the previous month. India is undergoing a prolonged phase of a slowdown and the manufacturing output has narrowed significantly. However, in January, IIP for the mining, manufacturing and electricity sectors grew at 4.4 per cent, 1.5 per cent and 3.1 per cent, compared to the same month previous year. Also, the cumulative growth in these three sectors during April-January in the current fiscal grew 1 per cent, 0.3 per cent, and 0.9 per cent respectively on-year, according to the Ministry of Statistics and Programme Implementation (MOSPI).
In terms of industries, eleven out of the twenty-three industry groups in the manufacturing sector have shown positive growth during the month of January 2020 as compared to the corresponding month of the previous year. Surprisingly, the industrial production of intermediate goods grew at 15.8 per cent on-year in January. However, the industrial production of capital goods, infrastructure goods, and consumer durables shrank in the month of January.
The industry group ‘Manufacture of tobacco products’ has shown the highest positive growth of 22.8 per cent followed by 14.1 per cent in ‘Manufacture of basic metals’ and 9.0 per cent in ‘Manufacture of furniture’. Meanwhile, an earlier report of RBI had suggested that the manufacturing firms expect weak demand conditions and reduced input price pressures in the fourth quarter of the current fiscal year as well. However, an uptick in the factory output in the first month of the quarter may send a positive signal for February and March too.