India’s industrial production scaled up in January to record 0.1 per cent growth after posting a decline since September last year. Higher electricity and mining output led to an improvement in IIP print but the manufacturing sector which comprises 75 per cent of the output declined 0.7 per cent. In December, manufacturing had contracted 1.6 per cent.
Electricity generation posted a growth of 6.5 per cent in January compared to 7.5 per cent in December while mining with 14 per cent weight in IIP, grew 0.7 per cent as against 0.4 per cent in December.
But consumer durables sector, which gives a better picture of the demand in the economy, saw a decline 8.3 per cent against a deeply negative 16.2 per cent last month.
Growth in the capital goods segment too fell 4.2 per cent virus 3 per cent seen last month. Consumer non-durable sector growth declined 0.6 per cent versus a de-growth of 5.3 per cent month-on-month.
However, 11 out of 22 industry groups in the manufacturing sector witnessed positive growth in January as compared to the corresponding month of the previous year.
Intermediate goods saw a significant improvement and grew at 3.4 per cent.
The December IIP has been revised to -0.2 per cent from -0.6 per cent.
Analysts apprehended a lower level of industrial production for a long time may caste a shadow on overall economic growth.
Expressing concern, industry body Assocham said, “The negative growth of manufacturing has got serious implications for the overall growth, employment and trade balance”. It said cheap imports of various manufactured goods like electronics, chemicals and steel were resulting in domestic manufacturers to lower capacity utilization rates, leave alone adding new capacities.
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