Dashing hopes of recovery, industrial production contracted by 3.2% in November – the lowest level in over four years – due to poor performance of manufacturing sector and a sharp decline in capital goods output.
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The ministry of statistics and programme implementation released two separate set of data – index of industrial production (IIP) and consumer price index (CPI) – both likely to cause worry to the government amid lack of private investment and declining manufacturing. This is because inflation is still within the RBI’s 6 per cent target for January.
Growth in mining slowed to 2.3 per cent in November, down from 4.7 per in the previous month. Cumulative growth for the period April-November 2015 over the corresponding period of the previous year stands at 3.9%.
The General Index for the month of November 2015 stands at 166.6, which is 3.2 percent lower as compared to the level in the month of November 2014, read a government statement issued on Tuesday.
It comes after factory output expanded 9.8 per cent in October, the fastest pace of growth in five years.
The basic and intermediate goods’ output inched-down by (-)0.7 percent each.
Some other important items that have registered high positive growth include Gems and Jewellery (253.7%), Sugar Machinery (78.0%), Lubricating oil (66.5%), Wood Furniture (46.9%), PVC Pipes and Tubes (31.4%), Transformers (small) (30.2%), Polypropylene (including co-polymer) (30.1%) and Sugar (25.7%).
Rising for the fifth straight month, retail inflation, or consumer price index-based inflation, rose to 5.61 per cent in December, mainly on costlier vegetables and cereals.
The retail food inflation during the month under review was 6.4 percent for India as a whole, as against 6.07 percent in the month before.
The consumer price index, which the Reserve Bank of India tracks in setting lending rates, edged up to 5.61 percent from a year earlier, in line with the expectations of economists, the data showed.
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“We are not surprised as this is a very sticky consumer inflation, but is well within the RBI target of 6 percent”. The Consumer durables and Consumer non-durables have recorded growth of 12.5 percent and (-) 4.7 percent respectively, with the overall growth in Consumer goods being 1.3 percent. “It also underlines the need for more measures to stimulate investments and deeper structural reforms”, Ficci President Harshavardhan Neotia said. “Nevertheless, the contraction in output revealed by the initial estimates for the IIP for November 2015 is disappointing compared to our forecast of marginal growth (+0.2%)”, said Aditi Nayar, senior economist at ICRA.
