Industrial production barely expands at 0.6% in August

Industrial production in the country based on the index of industrial production (IIP) expanded at a negligible 0.6 per cent from a year-ago, cementing fears of authorities struggling to reverse a slowdown in Asia's third biggest economy.

Official figures released on Friday showed the index of industrial production was marginally higher at 2.8 per cent in July against the 2.6 per cent growth reported earlier.

Industrial production for the April-August 2013-14 period also showed a nominal 1 per cent growth over the corresponding period of the previous year.

Manufacturing output (which has a 75 per cent weight in the IIP) declined 0.1 per cent from a year earlier in August and mining output fell 0.2 per cent, while electricity production was buoyant, showing a 7.2 per cent increase, data released by the Central Statistical Office (CSO) showed

Cumulative growth in the three sectors during April-August 2013-14 over the corresponding period of 2012-13 has been (-) 0.1 per cent, (-) 3.4 per cent and 4.5 per cent, respectively.

Fourteen out of the 22 industry groups in the manufacturing sector have shown positive year-on-year growth during August 2013.

The industry group 'electrical machinery and apparatus' showed the highest positive growth of 26 per cent, followed by `wearing apparels, dressing and dyeing of fur' (25.5 per cent) and 'tobacco products' (19.7 per cent).

On the other hand, the industry group 'radio, TV and communication equipment and apparatus' showed a negative growth of 21.7 per cent, followed by 'furniture manufacturing' (21.6 per cent) and 'machinery and equipment' (15.5 per cent).

Basic goods production increased by 1.5 per cent while capital goods production declined by 2.0 per cent and production of intermediate goods rose 3.6 per cent in August 2013,

Production of consumer durables and consumer non-durables recorded growth rates of (-) 7.6 per cent and 5.0 per cent, respectively, with the overall growth in consumer goods being (-) 0.8 per cent.

Some of the important items that showed high positive growth year-on-year during August 2013 included: woollen carpets (67.7 per cent), apparels (25.1 per cent), leather garments (26.6 per cent), aviation turbine fuel (46.2 per cent), vitamins (75.0 per cent), ayurvedic medicaments (80.6 per cent), steel structures (25.4 per cent), tractors (32.2 per cent), rubber-insulated cable (284.5 per cent) and passenger cars (31.5 per cent).

Some of the other important items that showed high negative growth include: rice (- 38.0 per cent), stainless/ alloy steel (-25.8 per cent), boilers (- 35.7 per cent), sealed compressors (- 50.4 per cent), room air conditioner (- 52.3 per cent), heat exchangers (- 51.7 per cent), earth moving machinery (- 45.8 per cent) sugar machinery (- 36.7 per cent) plastic machinery – including moulding machinery (- 33.7 per cent), cement machinery (- 48.0 per cent) aluminium conductor (-31.7 per cent), generator/ alternator (- 72.7 per cent), telephone instruments – including mobile phones and accessories            (- 23.9 per cent) and gems and jewellery (- 36.1 per cent).

After posting a tepid 1.1 per cent increase in the last fiscal year ended on 31 March 2013, India's industrial output declined in two of the first five months of this year, amidst weakening demand and high borrowing costs.

The industrial slowdown also dragged economic growth, which slipped to a decade-low rate of 5.0 per cent in the last fiscal.

The economy lost further momentum in the three months to June, expanding at an even slower pace of 4.4 per cent.