India’s industrial production grows at 2.1% in June

Industrial production in the country based on the index of industrial production (IIP) rose 2.1 per cent year-on-year in June, driven mainly by higher production of consumer durables and electricity, quick estimates released by the Indian Statistical Office (ISO) showed.

Industrial output in the country had expanded at a higher pace 4.2 per cent in June last year. The June growth was, however, faster than the 1.1 per cent (revised from the provisional 1.2 per cent) in May.

The slowing of production was evident mainly in manufacturing with a heavy contraction in capital goods production.

Cumulative growth of industrial production during April-June 2016 stood at 0.6 per cent compared to a 3.3 per cent growth in the year-ago period.

The indices of industrial production for the mining, manufacturing and electricity sectors for June 2016 stand at 4.7 per cent, 0.9 per cent and 8.3 per cent, respectively. Cumulative growth in production in these three sectors during April-June 2016 over the corresponding period of 2015 stood at 2.3 per cent, (-) 0.7 per cent and 9.0 per cent, respectively.

Manufacturing output, which has a 75 per cent share in the Index of Industrial Production (IIP), saw a meager growth of 0.9 per cent in June compared with a 5.2 per cent growth a year ago. For the April-June quarter, the sector's output showed contraction by 0.7 per cent, against a growth of 3.7 per cent a year ago.

Capital goods output registered a steep decline of 16.5 per cent in June against a contraction of 2 per cent last year. In April-June, capital goods production declined by 18 per cent against a growth of 2 per cent a year ago.

Production growth of consumer durables decelerated to 5.6 per cent in June from 16.1 per cent a year ago. Consumer non-durable goods production also recorded low growth of 1 per cent in June compared with 2.3 per cent a year ago

Eighteen out of the 22 industry groups in the manufacturing sector have shown positive growth during June 2016.

Basic goods production rose 5.9 per cent while capital goods production declined by 16.5 per cent and intermediate goods production was up 6.1 per cent.  Production of consumer durables and consumer non-durables recorded growth rates of 5.6 per cent and 1.0 per cent, respectively, with the overall growth in consumer goods being 2.8 per cent.