India's August industrial output grows at 0.4 percent

Industrial activity, measured in terms of the Index of Industrial Production (IIP), grew marginally by 0.4 percent in August over the same month of the previous year, government data released Friday showed.

The August industrial growth compared unfavourably with the 0.5 percent recorded in the previous month, the Central Statistics Office data showed.

The cumulative growth for April-August 2014-15 over the corresponding period of the previous year stands at 2.8 percent.

"The IIP data is indeed disappointing and we sincerely hope for an upward revision to be announced in coming months. It is really surprising that despite core sector and intermediate sectors of the economy performing reasonably well, the IIP data was this weak," said Debopam Chaudhuri, chief economist, ZyFin Research.

The July industrial activity had also gown at a snails pace at 0.5 percent. The cumulative growth for April-July 2014-15 over the corresponding period of the previous year stands at 3.3 percent.

The drop in July was mainly attributed to the lower output in consumer goods.

The drop in August is mainly due to the downfall in manufacturing and consumer durables like radio, TV, communication equipment, computers and electricity machinery.

Consumer durables output contracted by 15 percent year-on-year, while capital goods, fell 11.3 percent and consumer goods output declined by 6.9 percent. Basic goods, however, grew 9.6 percent compared to 0.9 percent month-on-month.

While manufacturing activity contracted 1.4 percent, as against a negative growth of 0.2 percent in the previous month, the mining sector recorded 2.6 percent increase versus deceleration of 0.9 percent.

The cumulative growth during April-August 2014-15 over the corresponding period of 2013-14 has been 2.5 percent in mining, 1.8 percent in manufacturing and 11.7 percent in electricity.