Industrial production contracted for the second consecutive month in December – dragged down by manufacturing and mining – and raised fresh doubts about the contradiction between the factory output number and the gross domestic product (GDP) data released by the Central Statistics Office (CSO).
Advertisement
Cumulative industrial growth for April-December 2015 was 3.1 per cent, up from 2.6 per cent in the same period a year ago.
The manufacturing sector, which accounts for over 75 per cent of the index of industrial production (IIP), declined 2.4 per cent against a growth of 4.1 per cent a year ago.
Items which showed high negative growth during December 2015 over the same month in the previous year include “Cable, Rubber Insulated” [(-) 85.2%], “Heat Exchangers” [(-) 68.8%], “Cement Machinery” [(-) 60.2%], “Soyabean oil” [(-) 59.0%], “Polythene Bags including HDPE & LDPE Bags” [(-) 53.9%], “Grinding Wheels” [(-) 37.4%], “Ayurvedic Medicaments” [(-) 24.4%], “Boilers” [(-) 22.7%] and “Sponge Iron” [(-) 22.5%]. The industrial output had contracted 3.4 per cent in November, while the retail inflation had stood at 5.61 per cent a month ago.
While consumer inflation remaining below the RBI’s projection of 5.8 per cent for January is good news for the government, rising prices of pulses and ballooning rural inflation may prove to be more hard to counter in coming months. 5 % in December as towards a contraction of 9.2 % throughout the identical month final fiscal.
It’s the last set of data on industrial production and consumer price inflation to come out before finance minister Arun Jaitley presents the National Democratic Alliance (NDA) government’s second full-year budget on 29 February.
In addition, the data revealed that among the six use-based classifications of the index, the output of consumer durables segment expanded by 16.5 percent in December. The index had registered a growth of 3.6 per cent in December 2014, it said.
The pace of retail price rise in January is the highest since 6.46 per cent in September 2014.
In terms of industries, ten out of the twenty two industry groups in the manufacturing sector showed negative growth during December 2015 as compared to corresponding month of the previous year.
The data had shown consumption outpacing investments, signalling potential inflationary risks.
Retail prices of “cereals and products” inched up by 2.19 percent in January, from 2.12 percent in December 2015.
Advertisement
Meat and fish prices rose 8.23 per cent during the month, while inflation in eggs was 3.96 per cent. Vegetable prices rose 6.39 per cent in the first month of 2016.
