India’s Industrial Production (IIP) declined to a seven-month low of 3.2 per cent in May as compared to 4.8 per cent in April, mainly due to slow manufacturing activity and sluggish performance of power sectors, and the FMCG sector. The cumulative growth in May over the corresponding period last year stands at 4 per cent, data released on Thursday by the Ministry of Statistics and Programme Implementation showed. The previous low of industrial production growth was 1.8 per cent in October 2017.
In terms of industries, 13 out of the 23 industry groups in the manufacturing sector have shown positive growth in May 2018 as compared to the previous year. The manufacturing sector that constitutes 77.63 per cent of the index grew by just 2.8 per cent in May. The growth is marginally up from 2.6 per cent last year. Power generation growth decelerated sharply to 4.2 per cent in May as compared to a high of 8.3 per cent year ago. The mining sector also registered an impressive growth of 5.7 per cent as against 0.3 per cent in May last year.
The user-based segment shows primary goods grew by 5.7 per cent, capital goods at 7.6 per cent, intermediate goods 0.9 per cent and infrastructure or construction goods rose 4.9 per cent. The consumer durables recorded 4.3 per cent growth while non-durables decelerated 2.6 per cent compared to a growth of 9.7 per cent year ago, registering worst performance in the segment.
Industry group ‘manufacture of computer, electronic and optical products’ has shown the highest positive growth of 27 per cent followed by 21.1 per cent in the manufacturing of motor vehicles, trailers and semi-trailers and 13.2 per cent in the manufacturing of furniture. ‘Other manufacturing’ has shown the highest negative growth of (-) 31.9 per cent followed by (-) 15.6 per cent in the manufacturing of tobacco products and (-) 12.8 per cent in the manufacturing of wearing apparel, it said.
During its June 4 bi-monthly meeting, the RBI’s Monetary Policy Committee had stated that industrial production could slow down in Q1 of the fiscal year 2018-19 due to a significant rise in input prices and perceptions of softening domestic and external demand conditions.