Industrial production shrinks by 1.1 pc in August; poorest performance in 7 years
New Delhi, Oct 11: Signs of slowdown became more pronounced as the government data on Friday revealed factory output shrank by 1.1 per cent in August, recording the poorest performance in seven years due to a sharp decline in production of capital goods and consumer durable.
Industrial production growth for the first time in more than two years has treaded into negative territory.
The Index of Industrial Production (IIP) had shown a growth of 4.8 per cent in August 2018. The previous low in IIP was (-) 1.7 per cent in November 2012.
The manufacturing sector, which contributes over 77 per cent to the IIP, contracted by 1.2 per cent, the lowest in five years, as against a growth of 5.2 per cent in the year-ago month, according to the data released by the National Statistical Office (NSO).
The previous low in the manufacturing segment was recorded at (-) 1.8 per cent in October 2014.
The data revealed that electricity generation growth too was in negative at (-) 0.9 per cent as against an expansion of 7.6 per cent in the year-ago month while the mining sector growth was flat at 0.1 per cent.
Earlier this month, the RBI revised downwards its GDP growth forecast for the current fiscal to 6.1 per cent from the previous estimate of 6.9 per cent after the first-quarter economic growth slipped to over six-year low of 5 per cent.
Providing further details of the IIP, the NSO data showed the worst performance came from the capital goods segment as its output shrank by over 21 per cent as against an expansion of 10.3 per cent in August last year.
Consumer durables output too declined by 9.1 per cent in August 2019 as against 5.5 per cent growth in the same month of 2018.
Another poor performing segment was infrastructure/ construction goods. It showed a decline of 4.5 per cent in August 2019 as against a growth of 8 per cent in the corresponding month of last year.
'Intermediate goods' sector, however, showed a healthy growth of 7 per cent, up from 2.9 per cent in the year-ago month. Consumer non-durables segment posted an expansion of 4.1 per cent in August. This compares with 6.5 per cent expansion in August 2018.
In terms of industries, 15 out of the 23 industry groups in the manufacturing sector have shown negative growth during August 2019 as compared to the corresponding month of the previous year.
Commenting on the IIP numbers, K Joseph Thomas, Head Research, Emkay Wealth Management said the data amply reflects the underlying weakness in manufacturing and industrial activity which needs to be addressed without much loss of time for economic recovery.
Aditi Nayar, Vice President, Principal Economist there is a growing likelihood that the GDP growth may not meaningfully accelerate in the second quarter of the current fiscal from the multi-quarter low 5 per cent recorded in April-June quarter, despite a favourable base effect.
The extent of pickup in consumption in the festive months and crop production in the rabi season will signal whether a material turnaround in demand and economic growth are in the offing, she said.
Moody's Investors Service on Thursday slashed its 2019-20 GDP growth forecast for India to 5.8 per cent from 6.2 per cent earlier, saying the economy was experiencing a pronounced slowdown.
Meanwhile, the NSO revised upwards the IIP growth for July to 4.6 per cent from the earlier estimate of 4.3 per cent.
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MP cruise boat tragedy: Search ops expanded to trace four missing passengers
Jabalpur (PTI): Army divers and disaster response teams on Saturday expanded their search at Bargi Dam in Madhya Pradesh to locate a man and three children still missing after the cruise boat tragedy that claimed nine lives two days ago, officials said.
With 28 of the 41 identified passengers onboard the ill-fated cruise boat rescued safely, police are preparing to register an FIR in connection with the accident that occurred at the reservoir in Jabalpur district on Thursday evening, they said.
The search radius has been expanded to 5 km in the backwaters of the Bargi Dam, located downstream of the Narmada River, area sub-divisional officer of police (SDOP) Anjul Ayank Mishra told PTI.
Nine people drowned in the incident, while 28 were rescued, and efforts are ongoing to trace the missing persons, he said.
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According to the police, more than 200 rescuers, including around 20 Army divers airlifted from Agra, began the search operation at 5 am on Saturday to trace Kamraj, an employee of the Ordnance Factory in Khamaria, his son Tamil (5), Vijay Soni (6) and Mayuram (5).
Mishra said that an inquest case has been registered and the post-mortem of nine deceased persons has been completed.
"Our priority is to search for the missing persons. We will soon register an FIR," he said.
Investigators have said that CCTV footage near the boarding point showed 43 people heading towards the ill-fated boat, and the names of 41 persons, who boarded the vessel, have been ascertained so far.
Collector Raghvendra Singh confirmed that a search is underway for four missing persons.
The rescue operation, being carried out by the National Disaster Response Force (NDRF), State Disaster Response Force (SDRF) and local divers, was briefly affected around 9 am due to strong winds.
The state government on Friday ordered a probe into the incident and dismissed three crew members after survivors alleged negligence and safety lapses, including failure to provide life jackets.
The government also banned the operation of similar vessels in the state.
The boat, operated by the state tourism department, sank during a sudden storm around 6 pm on Thursday, and the wreckage was retrieved from the dam water on Friday, after the rescuers confirmed that there were no more bodies inside.
Eyewitnesses have said that strong winds made the water choppy, prompting passengers to raise an alarm and ask the crew to steer the vessel towards the riverbank.
A survivor alleged negligence by the crew and described a last-minute scramble for life jackets.
