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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NDA's win in Bihar Assembly bypolls a matter of concern: Prashant Kishor
Patna, Nov 23: Political strategist turned activist Prashant Kishor on Saturday dubbed as "a matter of concern" the NDA's win in assembly by-polls in Bihar despite "failure" of the BJP-led coalition to end the state's chronic backwardness during it's decades-long rule.
Talking to reporters here shortly after the results were out, Kishor also drew succour from the fact that his fledgling Jan Suraaj won "10 per cent" of the total votes polled in four seats, but rubbished the claim that it had played a role in the RJD's defeat in three of these.
"RJD is a 30-year-old party. The son of its state president finished third. Can Jan Suraaj be faulted for that? In Belaganj all Muslim votes went to the JD(U) candidate. In Imamganj, the Jan Suraaj cut into NDA votes. Else, the victory margin of (Union minister) Jitan Manjhi's Hindustani Awam Morcha would have been bigger", asserted Kishor.
Notably, Imamganj, a reserved seat, was retained by Manjhi's daughter-in-law Deepa, who defeated the RJD candidate by a thin margin of less than 6,000 votes. Jan Suraaj candidate Jitendra Paswan finished third, polling more than 37,000 votes.
When pointed out that in three of the four seats, candidates of Jan Suraaj had polled less than one-sixth of the total votes and ran the risk of losing their deposits, Kishor shot back "That should not be a matter of concern (chinta ki baat). If there is a matter of concern, it is the ability of the NDA to make a clean sweep despite having ruled Bihar for so long and "failed" to end the state's backwardness".
The IPAC founder, who had a brief stint in the JD(U), insisted that the party's supremo Nitish Kumar, the Chief Minister of Bihar, was a "spent force" and its candidate, former MLC Manorama Devi, had won on her own steam.
"We have always said that our fight is with NDA, not with RJD despite its claim of being the largest party in Bihar.....(but) Nitish Kumar is no factor. His party polled just about 11 per cent of total votes", said Kishor.
About his own party's inability to make a mark, Kishor said "We have secured 10 per cent votes..... in seats where Jan Suraaj had no presence since these areas were yet to be covered by my padyatra. Also, please note that we got our poll symbol after filing of nomination papers was over".
He also maintained that the Jan Suraaj will go solo in the assembly polls due next year when it will contest "all 243 seats".
"We were initially written off but by garnering about 10 per cent votes, in a state known to vote along predictable caste lines, we have proved a point. In the next few months we shall be strengthening the organization to ensure that vote share of the Jan Suraaj improves", he said.
