scorecardresearch

Industrial growth slows down for 4th month in a row to 0.4% in December

According to the Index of Industrial Production (IIP) data by the National Statistical Office (NSO), the manufacturing sector’s output contracted by 0.1 per cent in December 2021.

Industrial growth slows down for 4th month in a row to 0.4% in December
In December 2021, the mining output climbed 2.6 per cent, and power generation increased by 2.8 per cent.

India’s industrial production growth slowed down for a fourth straight month in December to 0.4 per cent mainly due to a poor performance by the manufacturing sector.

The manufacturing sector, which constitutes 77.63 per cent of the Index of Industrial Production (IIP), contracted by 0.1 per cent in December, according to the data released by the National Statistical Office (NSO) on Friday.

In December 2021, the mining output rose by 2.6 per cent, and power generation increased by 2.8 per cent.

The factory output growth was in double-digits in four months to August this fiscal. But it slipped to 4.4 per cent in September and further to 4 per cent in October.

The IIP growth for November 2021 was revised downwards to 1.3 per cent from the provisional estimate of 1.4 per cent released last month.

The IIP had grown by 2.2 per cent in December 2020.

During April-December this fiscal, the IIP grew by 15.2 per cent against a 13.3 per cent contraction in the same period last year.

The data showed that industrial production recovered in September 2020. The IIP had grown by 1 per cent in September 2020.

Industrial production plunged 18.7 per cent in March last year following the COVID outbreak and remained in the negative zone till August 2020.

With the resumption of economic activities, factory output rose 1 per cent in September 2020 and 4.5 per cent in October 2020. In November 2020, it fell 1.6 per cent and then entered the positive territory with a 2.2 per cent growth in December 2020.

The IIP had recorded a contraction of 0.6 per cent and 3.2 per cent in January 2021 and February 2021, respectively. In March 2021, it grew 24.2 per cent.

For April 2021, the NSO held back the release of complete IIP data.

In May 2021, the IIP rose by 27.6 per cent, and in June by 13.8 per cent. The factory output grew 11.5 per cent in July 2021 and 13 per cent in August.

The second wave of the pandemic started in the middle of April 2021, and many states imposed restrictions to curb the spread of coronavirus infections.

“The growth rates over the corresponding period of the previous year are to be interpreted considering the unusual circumstances on account of COVID 19 pandemic since March 2020,” the NSO said in the statement.

The government had imposed a nationwide lockdown to contain the spread of coronavirus infections on March 25, 2020.

The latest NSO data showed that the production of capital goods, a barometer of investment, contracted by 4.6 per cent in December 2021. It had grown by 2.2 per cent in the year-ago period.

Consumer durables manufacturing shrank 2.7 per cent in the month under review against a growth of 6.5 per cent in December 2020.

Consumer non-durable goods production declined by 0.6 per cent in December 2021 against a 1.9 per cent growth in the year-ago period.

Get live Share Market updates and latest India News and business news on Financial Express. Download Financial Express App for latest business news.