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 HC sets up judicial commission to probe water contamination in Indore
Indore (PTI): The Indore bench of Madhya Pradesh High Court on Tuesday set up a commission of inquiry comprising a former HC judge to probe the issue of water contamination in city's Bhagirathpura, saying the matter requires probe by an independent, credible authority and "urgent judicial scrutiny".
It also directed the commission to submit an interim report after four weeks from the date of commencement of proceedings.
A division bench of Justices Vijay Kumar Shukla and Alok Awasthi constituted the commission while hearing several public interest litigations (PILs) filed simultaneously regarding the deaths of several people in Bhagirathpura due to the consumption of contaminated water.
The HC reserved the order after hearing all the parties during the day, and released it late at night.
The state government on Tuesday told the HC that the deaths of 16 people in Indore's Bhagirathpura area was possibly linked to a month-long outbreak of vomiting and diarrhoea caused by contaminated drinking water.
The government presented an audit report of 23 deaths from the current gastroenteritis epidemic in Bhagirathpura before the bench, suggesting that 16 of these fatalities may have been linked to the outbreak of vomiting and diarrhoea caused by contaminated drinking water.
The report, prepared by a committee of five experts from the city's Government Mahatma Gandhi Memorial Medical College, stated that the deaths of four people in Bhagirathpura were unrelated to the outbreak, while no conclusion could be reached regarding the cause of death of three other people in the area.
During the hearing, the high court sought to know from the state government the scientific basis behind its report.
The division bench also expressed surprise at the state government's use of the term "verbal autopsy" in relation to the report, sarcastically stating that it had heard the term for the first time.
The HC expressed concern over the Bhagirathpura case, stating that the situation was "alarming," and noted that cases of people falling ill due to contaminated drinking water have also been reported in Mhow, near Indore.
In its order, the HC said the serious issue concerning contamination of the drinking water supply in Bhagirathpura area allegedly resulted in widespread health hazards to residents, including children and elderly persons.
According to the petitioners and media reports, death toll is about 30 till today, but the report depicts only 16 without any basis or record, it said.
It is averred that sewage mixing, leakage in the pipeline, and failure of civic authorities to maintain potable water standards have led to the outbreak of water-borne diseases. Photographs, medical reports, and complaints submitted to the authorities prima facie indicate a matter requiring urgent judicial scrutiny, the HC said.
"Considering the gravity of the allegation and affecting the right to life under Article 21 of the Constitution of India and the need for an independent fact-finding exercise, the Court is of the opinion that the matter requires investigation by an independent, credible authority," it said.
"Accordingly, we appoint Justice Sushil Kumar Gupta, former judge of the Madhya Pradesh High Court, a one-man commission of inquiry into the issues relating to water contamination in Bhagirathpura, Indore, and its impact on other areas of the city," the HC added.
As per the order, the commission shall inquire into and submit a report on the cause of contamination -- whether the drinking water supplied to Bhagirathpura was contaminated; and the source and nature of contamination (sewage ingress, industrial discharge, pipeline damage etc).
The panel will also probe the number of actual deaths of affected residents on account of contaminated water; find out the nature of disease reported and adequacy of medical response and preventive measures; suggest immediate steps required to ensure safe drinking water as well as long-term infrastructural and monitoring reforms.
It will also identify and fix responsibility upon the officers and officials found prima facie responsible for the Bhagirathpura water contamination incident, and suggest guidelines for compensation to affected residents, particularly vulnerable sections.
The commission shall have powers of a civil court for the purpose of summoning officials and witnesses; calling up records from the government department, hospitals, laboratories and civic bodies; ordering water quality testing through accredited laboratories; conducting spot inspections.
All state authorities involving district administration, Indore Municipal Corporation, public health engineering department and Madhya Pradesh Pollution Control Board shall extend full co-operation and provide records as sought by the commission, it said.
The state government shall provide office space, staff, and logistical support to the commission, it said.
During the hearing in the day, the state government also presented a status report to the court in this matter.
According to reports, a total of 454 patients were admitted to local hospitals during the vomiting and diarrhea outbreak, of whom 441 have been discharged after treatment, and 11 are currently hospitalised.
According to officials, due to a leak in the municipal drinking water pipeline in Bhagirathpura, sewage from a toilet was also mixed in the water.
