Industrial Production for September 2019 contracts 4.3%: Govt data

Quick Estimates of Index of Industrial Production (IIP) with base 2011-12 for the month of September 2019 stands at 123.3, which is 4.3 per cent lower as compared to the level in the month of September 2018, said a government statement. The cumulative growth for the period April-September 2019 over the corresponding period of the previous year stands at 1.3 percent.

According to the government data, Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of September 2019 stand at 86.5, 126.5 and 158.7 respectively, with the corresponding growth rates of (-) 8.5 percent, (-) 3.9 percent and (-) 2.6 percent as compared to September 2018. 

The cumulative growth in these three sectors during April-September 2019 over the corresponding period of 2018 has been 1.0 percent, 1.0 percent and 3.8 percent respectively.

In terms of industries, 17 out of the 23 industry groups in the manufacturing sector have shown negative growth during the month of September 2019 as compared to the corresponding month of the previous year. The industry group ‘Manufacture of motor vehicles, trailers and semi-trailers’ has shown the highest negative growth of (-) 24.8 percent followed by (-) 23.6 percent in ‘Manufacture of furniture’ and (-) 22.0 percent in ‘Manufacture of fabricated metal products, except machinery and equipment’.

On the other hand, the industry group ‘Manufacture of wood and products of wood and cork, except furniture; manufacture of articles of straw and plaiting materials’ has shown the highest positive growth of 15.5 percent followed by 9.2 percent in ‘Manufacture of basic metals’.

As per Use-based classification, the growth rates in September 2019 over September 2018 are (-) 5.1 percent in Primary goods, (-) 20.7 percent in Capital goods, 7.0 percent in Intermediate goods and (-) 6.4 percent in Infrastructure/ Construction Goods. The Consumer durables and Consumer non-durables have recorded growth of (-) 9.9 percent and (-) 0.4 percent respectively.

Along with the Quick Estimates of IIP for the month of September 2019, the indices for August 2019 have undergone the first revision and those for June 2019 have undergone the final revision in the light of the updated data received from the source agencies.

Statements giving Quick Estimates of the Index of Industrial Production at Sectoral, 2-digit level of National Industrial Classification (NIC-2008) and by Use-based classification for the month of September 2019, along with the growth rates over the corresponding month of the previous year including the cumulative indices are enclosed.

Earlier on November 7, Moody’s Investors Service changed its outlook on India’s ratings to 'negative' from 'stable', citing increasing risks that the country’s economic growth will remain lower than in the past.

The outlook reflected the ineffectiveness of the government and its policy in addressing economic weakness, which led to an increase in debt burden from already-high levels, the rating agency said.

Meanwhile, Fitch Ratings had also lowered India's FY20 GDP growth forecast to 5.5 percent stating that a large credit squeeze emanating from non-banking financial companies (NBFCs) has pushed economic growth to a six-year low.