India’s Industrial Production, based on the index of industrial production (IIP), contracted by a record 16.7 per cent in March 2020 even as the government imposed a nation-wide lockdown on 25 March that saw economic activity across the country coming to a standstill.
The Index of Industrial Production (IIP) had grown by 4.5 per cent in February and 2.7 per cent in March 2019.
The estimates of IIP (with base 2011-12) are based on data compiled from information received from source agencies, which in turn receive the data from the producing factories/establishments, with a six weeks lag.
“In view of the global Covid-19 pandemic and consequent nationwide lockdown measures implemented since March 2020, the data flow from the producing units was impacted. As some of these units are yet to resume operations, the response rate has been lower than usual. Consequently, the estimates are likely to undergo revision and will be incorporated in subsequent releases as per the revision policy of IIP,” according to the release issued by the Central Statistics Office (CSO).
Manufacturing sector output contracted by 20.6 per cent in March and electricity generation shrank by 6.8 per cent, while mining sector output growth remained flat at 0.0 per cent. Production in the manufacturing and electricity sectors had grown by 3.1 per cent and 2.2 per cent, respectively, in March 2019.
Production declined across various sectors, including primary goods, capital goods, intermediate goods and infrastructure/ construction goods for March 2020. Further, production in the consumer durables and non-durables sector stands lower in March 2020.
Along with the quick estimates of IIP for March 2020, the indices for February 2020 have undergone the first revision and those for December 2019 have undergone the final revision in the light of the updated data received from the source agencies, CSO stated.