A retarded growth in manufacturing output slowed India’s overall industrial production expansion to 2.7 percent for May — against 4.1 percent in April, official data showed on Friday.
As per the quick estimates of the Index of Industrial Production (IIP) released by the Central Statistical Office (CSO), the growth in manufacturing output fell from 5.1 percent in April and 5.9 percent in May 2014 to 2.2 percent in the month under review.
The manufacturing sector, which has the maximum weightage in the IIP, grew by 3.2 percent between April and May. The mining and electricity output expanded by 2.8 percent and 6 percent respectively.
The performance of mining and electricity sectors was subdued in April. The mining sector inched up by 0.6 percent while electricity segment slipped by 0.5 percent in April.
The cumulative growth for the first two months of this fiscal was 3 percent. In April, when the overall industrial output had expanded by 4.1 percent, industry saw it as emerging greenshoots of economic recovery, especially since the expansion was led by manufacturing.
“In terms of industries, 12 out of the 22 industry groups in the manufacturing sector have shown positive growth during May 2015 as compared to the corresponding month the previous year,” an official statement said.
Going into further classification, the growth in May 2015 was 6.4 percent in basic goods, 1.8 percent in capital goods and 1.2 percent in intermediate goods. But outputs of consumer durables and consumer non-durables declined by 3.9 percent and 0.1 percent respectively.
According to the data, items showing high positive growth during the month under review were lubricating oil (123.7 percent), copper and its products (86.8 percent), wood furniture (64.1 percent), vitamins (34.5 percent), tea (29.2 percent) and carbon steel (22 percent).
Items showing high negative growth were: woollen carpets (-43.7 percent), grinding wheels (-42.9 percent), viscose staple fibre raw (-41.2 percent), ayurvedic medicaments(-34.5 percent), aerated waters and soft drinks (-31.6 percent), fruit pulp (-29.9 percent), telephone instruments including mobile phones and accessories (-29.4 percent) and tractors (-27.2 percent).
Indian industry commented that the manufacturing sector growth is picking up though it remains sluggish.
“Measures taken up in the last few months to expedite the project clearances and also in the area of ease of doing business have started yielding results and we are hopeful that growth will accelerate in coming months,” said Jyotsna Suri, president, Federation of Indian Chambers of Commerce and Industry (FICCI).
“Negative consumer demand growth is an area of concern and we hope that Government would bring out specific measures to stimulate demand in the economy,” Suri noted.
India Inc. also pointed out the silverlining being the positive growth in capital goods sector which indicated turnaround in investments scenario.
Dhananjay Sinha, head of research, economist and strategist for Emkay Global Financial Services said: “Consumption oriented sectors, in line with our expectations continued to show weakness. Weakness in consumption is indicative of weak rural demand and low government revenue expenditure.”
Debopam Chaudhuri, chief economist of ZyFin Research said that: “IIP growth remains sticky at an average level of around 3 percent. Since January 2015, there has been no clear uptrend visible within the data, suggesting India is still struggling to break itself from the shackles of the previous slowdown.” (IANS)