New Delhi: India's industrial production contracted by 0.1 percent in June as against growth of 8 percent a year ago, mainly due to poor show by manufacturing and capital goods output.


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The factory output growth, measured on the Index of Industrial Production (IIP), for April-June period decelerated to 2 percent from 7.1 percent in the same period last fiscal, as per the data released by the Central Statistics Office


The manufacturing sector, which constitutes over 75 percent of the IIP index, contracted by 0.4 percent in June compared to 7.5 percent growth a year ago.


The data further revealed that output of the capital goods segment, considered as key indicator of investment, shrunk by 6.8 percent compared to a high growth of 14.8 percent recorded in June 2016.


The consumer durables segment too witnessed a contraction of 2.1 percent.


Mining sector output, however, grew by 0.4 percent in June against 10.2 percent growth in the year-ago month. Similarly, electricity generation expanded by 2.1 percent in June as against 9.8 percent growth in the corresponding period last year.


The Reserve Bank in its policy review meet this month has lowered its key lending rate by 0.25 percent, a move which is likely to translate into lower interest rates for home, auto and other loans as also boost economic activity.