July IIP falls 10.4%; industrial activity resuming with lifting of restrictions

Industrial production shrank by 10.4 per cent in July, mainly due to lower output of manufacturing, mining and power generation sectors, official data showed on Friday.

Explaining the reasons behind the fall in the Index of Industrial Production (IIP), the Ministry of Statistics and Programme Implementation said a large number of industrial units were not operating from the end of March due to the lockdown imposed to contain the spread of COVID-19.

"This has had an impact on the items being produced by the establishments during the period of lockdown," it said in a statement.

It further said industrial activity is resuming with the lifting of restrictions.

The ministry added that it "may not be appropriate to compare the IIP in the post pandemic months with the IIP for months preceding the COVID 19 pandemic."

However, it said the index for the month of July 2020 stands at 118.1 as compared to 108.9 in June, 89.5 in May and 54 in April.

According to the IIP data, factory output had registered a growth of 4.9 per cent in July 2019.

Meanwhile, the fall in IIP for June has been revised to (-) 15.77 per cent from the provisional estimates of 16.6 per cent contraction released last month.

As per the data, manufacturing sector, which constitutes 77.63 per cent of the IIP, recorded a decline of 11.1 per cent in July as against a growth of 4.8 per cent in same month last year.

Similarly, mining sector output fell 13 per cent in July as against a growth of 4.9 per cent earlier.

Power generation shrank by 2.5 per cent as against a growth of 5.2 per cent a year ago.

Output of capital goods, which is a barometer of investment, fell by 22.8 per cent in July as against a contraction of 7 per cent a year ago.

Consumer durables output also declined by 23.6 per cent, as against a contraction of 2.4 per cent in July 2019.

Consumer non-durable goods production grew by 6.7 per cent, as compared to a growth of 8.5 per cent a year ago.

The IIP for April-July period has contracted by 29.2 per cent, according to the data. It had registered a growth of 3.5 per cent during the same period last fiscal.