After scaling a five-year-high growth of 9.9% in October, industrial output contracted 3.2% in November, its first drop since October 2014, showed the official data released on Tuesday. Retail inflation inched up to 5.61% in December from 5.41% in the previous month, as food inflation rose to 6.40% last month, compared with 6.07% in November.
Manufacturing hit -4.4% in November, compared with 4.7% a year before. Mining rose just 2.3% in November, against 4% a year earlier, while electricity production barely rose (0.7% in Novemver against 10% in the same period last fiscal), the data showed. Importantly, the output of capital goods, a gauge for fixed corporate investment, shrank 24.4% in November, against a 7% expansion a year earlier. Consumer goods production rose only 1.3% in November even on a favourable base (The segment had contracted by 1.6% a year earlier). Still, the index of industrial production (IIP) grew 3.9% in the April-November period, compared with 2.5% a year earlier, thanks to a better print of the IIP earlier this fiscal.
The latest contraction brings to the fore the fluctuation in the IIP reading and reinforces fears that a sustained industrial recovery is still away.