Industrial growth shrinks another 1.9% in February
14 Apr 2014
India's manufacturing sector showed increasing weakness in February, as industrial production contracted by 1.9 per cent, reversing the feeble recovery of the preceding month.
The growth rate for the manufacturing sector shrank for the fifth month in a row. The sector, which accounts for 76 per cent of the index of industrial production (IIP), contracted by 3.7 per cent in February, figures released by the Central Statistics Office on Friday showed.
Production of capital goods shrank 17.4 per cent in an uncertain political environment ahead of the general elections.
Factory output showed a decline of 0.1 per cent during the 11-month period from April to February compared with growth of 0.9 per cent in the corresponding period a year earlier.
High interest rates on loans choked the demand for consumer durables such as TVs, washing machines and refrigerators, the output of which contracted by as much as 9.3 per cent during the month.
Industrial output for January was revised upward to growth of 0.8 per cent from a provisional estimate of 0.1 per cent. Overall, 13 of the 22 industry groups in manufacturing showed negative growth in February as compared to the corresponding month of 2012.
The mining sector, with a weight of about 14 per cent in the IIP, expanded by a meagre 1.4 per cent in February that too on a 7.7-per cent contraction in the same month a year ago.
Thirteen of the 22 industry groups clubbed under the manufacturing sector have shown negative growth. Communication equipment, electrical machinery and apparel industries led the decline.
Advanced estimates by the CSO had earlier pegged India's overall GDP growth in 2013/2014 at 4.9 per cent, slightly above the 4.5 per cent it clocked in 2012/2013. Manufacturing output was seen slipping 0.2 per cent in 2013/2014 compared with the 1.1 per cent inch-up the previous year - that would pull down the overall economy.
The year 2013/2014 is likely to be the worst for the manufacturing sector in more than a decade.
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