April IIP disappoints at -0.8%

Industrial output growth in the country disappointed at -0.8% in April 2016, pulled down by the manufacturing sector, which contracted by 3.1% over the same month in 2015.

The April numbers represent a break in the rising trend seen in two previous consecutive months of February and March.

In March, the Index of Industrial Production (IIP) that measures growth in industrial output, rose marginally by 0.1 % over the same month of 2015.

Industrial output growth in the whole of 2015-16 was measured at 2.4%, compared to 2.8% for 2014-15.

Growth in manufacturing, which constitutes roughly three-fourths of the index, contracted by 3.1%, government data showed on Friday.

It cumulatively grew by 2% in 2015-16, down from the 2.3% the previous year.

In April, 14 out of the 22 industry groups within manufacturing showed growth, up from 12 in March.

Industrial output from the key sector of capital goods, which declined for five consecutive months till March, has continued to contract at 24.9 % in April confirming bleak investment outlook. For 2015-16, capital goods output contracted by three % compared to growth of 6.3% in 2014-15.

Some relief was seen in the consumer durables sector, which maintained its uptrend at 11.8 %. In 2015-16, consumer durables grew 11.2% – the only sector that clocked double digit growth among all sectors.  

The combined output of eight core infrastructure sectors, which carry a total weight of nearly 38% in the IIP index, jumped to a 16 month high of 6.4 % in March due to a sharp pick-up in fertiliser and cement production and a commensurate rise in electricity generation. This was expected to give a push to the IIP.

Also, India’s Gross Domestic Product (GDP) grew from 7.6% in 2015-16 from 7.2 % in the previous year. The government expects it to be the range of 7 -7.75% in the current year.