The Ministry of Statistics and Programme Implementation on Friday said that Index of Industrial Production (IIP) growth for July 2020 had come in at -10.4%.
According to the details provided, IIP growth for the month of July had come in at -10.4% as against the expected -13%. All sectors except non-durables had shown negative growth rates, and the pharma sector has reportedly propped up growth in the FMCG segment. The improvement seen in the negative growth number on a month on month basis is a positive factor in this picture.
"In view of the preventive measures and announcement of nationwide lockdown by the Government to contain the spread of COVID-19 pandemic, a large number of the industrial sector establishments were not operating from the end of March 2020 onwards," it notes.
Amid the COVID-19 pandemic, the country had been under several phases of lockdown till the end of May. Since then, the government has made efforts to gradually reopen businesses and public spaces. However, it must be noted that even now, all facilities have not been opened up.
Officials say that in the coming month, growth is likely to be negative, but to a lesser extent. September may come closer to zero given the pick-up in human movement which will boost pre-festival sales.
The decline witnessed in capital goods will continue to rein high and will be the last to show a change in direction as presently there is less incentive for companies to invest given surplus capacity. The critical sectors to be tracked would be auto in particular in the coming months which have shown some signs of a turnaround – based on pent up demand to an extent.