Industrial production growth in India hits an 8-month low of (-) 2.4% in July

India's industrial production contracted by 2.4 per cent in July, registering the worst performance in eight months, mainly on account of declining output in manufacturing and capital goods sectors. Industrial production had grown by 4.3 per cent in July last year.

The previous low was witnessed in November last year when the factory output shrunk by 3.4 per cent.

Industrial production based on the index of industrial production (IIP) declined by 2.4 per cent year-on-year in July while cumulative growth in industrial production for the period April-July 2016 stood at (-) 0.2 per cent compared to 3.5 per cent growth in the year-ago period.

Meanwhile, industrial production growth for June was revised downward to 1.95 per cent from 2.1 per cent provisional estimates released last month.

Production in the mining, manufacturing and electricity sectors reported growth rates of 0.8 per cent, (-) 3.4 per cent and 1.6 per cent, respectively in July 2016, while cumulative growth for April-July 2016 for the three sectors stood at 2.0 per cent, (-) 1.4 per cent and 7.1 per cent, respectively.

Twelve out of the 22 industry groups in the manufacturing sector have shown negative growth during July 2016 compared to the corresponding month of the previous year.

The industry group 'electrical machinery and apparatus' has shown the highest negative growth of (-) 59.2 per cent, followed by 'medical, precision and optical instruments, watches and clocks' (- 16.8 per cent) and 'wearing apparel, dressing and dyeing of fur' (- 16.2 per cent).

On the other hand, 'tobacco products' has shown the highest positive growth of 22.3 per cent, followed by 'coke, refined petroleum products and nuclear fuel' 12.3 per cent and 'radio, TV and communication equipment and apparatus' (10.9 per cent).

Basic goods production increased by 2.0 per cent while capital goods production declined by 29.6 per cent and production of intermediate goods increased by 3.4 per cent in July.

Production of consumer durables and consumer non-durables recorded growth rates of 5.9 per cent and (-) 1.7 per cent, respectively, with the overall growth in consumer goods being 1.3 per cent.