Factory growth slows in May

Production from India’s factories slowed to 2.7 per cent in May from 3.36 per cent a month ago, prompted by a sharp fall in manufacturing and the consumer goods sector.

However, the growth in areas where the Narendra Modi government is focusing the most in order to boost infrastructure — electricity and mining — was reasonably good.

According to government data, the manufacturing sector reported a sharp decline in output. The growth in manufacturing was 2.2 per cent in May as against 5.1 per cent in April. Experts said a tepid performance in manufacturing output could have been due to high rate of interest, infrastructure bottlenecks, and low domestic and external demand.

The mining sector grew at 2.8 per cent, and electricity with a marginal slowdown at 6 per cent.

Consumer durables and consumer non-durables recorded growth of -3.9 per cent and -0.1 per cent, respectively. Capital goods, which had been growing over 4 per cent, logged only a 1.8 per cent growth.

Industry majors said that the steps taken by the government to expedite the project clearances in road, coal and power sectors would start showing results in the coming months.