Factory output crawls in August mainly due to contraction in manufacturing output and lower offtake of consumer goods
New Delhi : Industrial production growth remained subdued at five-month low of 0.4 per cent in August prompting the industry to raise pitch for bold reforms to spur the economy, reports PTI.
Factory output measured in terms of the Index of Industrial Production (IIP) growth remained slow in August mainly due to contraction in manufacturing output and lower offtake of consumer goods. The index had also grown at a meagre rate of 0.4 per cent in August, 2013.
“There is a need for taking … steps to revive investment and stimulate demand in the economy. This would entail expediting execution of approved projects and providing a competitive market for coal and mining sectors,” CII Secretary General Chandrajit Banerjee said. He also hoped that the recent announcements and policy actions like ‘Make in India’ initiative, ensuring flexible labour policy, etc should help the turnaround.
The consumer durables segment declined by 15 per cent in August, as against a dip of 8.3 per cent a year ago. Consumer non-durable goods output too declined by 0.9 per cent in August, compared to 5.4 per cent growth in same month last year.
The production of capital goods, a barometer of demand, contracted by 11.3 per cent in August, against 2 per cent decline in same month of last year, the CSO data showed. The mining sector grew by 2.6 per cent in August against a dip of 0.9 per cent a year ago.
Power generation, however, increased by 12.9 per cent in the month under review compared to 7.2 per cent growth a year ago.
IIP for July was also revised downwards to 0.41 per cent from the provisional estimates of 0.5 per cent released last month, according to the data released by the Central Statistics Office today.
During the April-August period of 2014-15, IIP grew at 2.8 per cent, as against flat production in same period in the previous fiscal.
According to the IIP data, manufacturing — which constitutes over 75 per cent of the index — contracted by 1.4 per cent in August, compared to 0.2 per cent decline in output a year ago. For April-August, the sector grew at 1.8 per cent, compared to 0.1 per cent contraction in the year-ago period. The consumer goods output contracted by 6.9 per cent in August against 0.9 per cent decline logged a year ago. For April-August, the segment showed contraction of 4.9 per cent, compared to a decline of 1.6 per cent in the same period of 2013-14.