Factory output in January expands amid slowdown woes; year 2020 starts on cheerful note

By: |
Updated: Mar 12, 2020 5:51 PM

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.

IIP, index of industrial production, IIP growth, factory outputAn earlier report of RBI had suggested that the manufacturing firms expect weak demand conditions and reduced input price pressures in the fourth quarter as well. (Bloomberg image)

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.

Also Read: Now you can’t make multiple trips on one GST e-way bill; govt plans to use FASTag to curb tax evasion

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. 

Do you know What is Cash Reserve Ratio (CRR), Finance Bill, Fiscal Policy in India, Expenditure Budget, Customs Duty? FE Knowledge Desk explains each of these and more in detail at Financial Express Explained. Also get Live BSE/NSE Stock Prices, latest NAV of Mutual Funds, Best equity funds, Top Gainers, Top Losers on Financial Express. Don’t forget to try our free Income Tax Calculator tool.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1BofA sees Q2 growth improving to -7.8%
2Economic revival mostly due to pent up demand, base effect; unlikely to sustain after festivals
3Emerging pattern of global trade