The IIP growth number of 5.6 per cent in May 2011 over May last year is the lowest in nine months. A downward trend in IIP has been seen since December 2010, with brief interludes of good news.
IIP down due to poor show by manufacturing, mining and power sectors
Despite near-term headwinds of rising input costs and the possibility of lower demand for products as Covid dented rural & urban India, and impacts both production & consumption, analysts remain bullish on stocks of fast moving consumer goods (FMCG) companies and expect the index to relatively outperform its peers in the second half of fiscal 2021-22 (FY22). In the past one year, prices of key commodities such as groundnut oil, mustard oil, Vanaspati, soya oil, sunflower oil and palm oil have shot up in the range of 20 per cent to 60 per cent, data show. The FMCG sector macros in this backdrop, according to analysts, have further deteriorated because of weakness in consumer demand and likely margin pressure due to elevated crude oil, palm oil and global food prices.
IIP's contraction deals a severe blow to the Indian economy.
Manufacturing sector, which constitutes over 75 per cent of the index, grew at 5.5 per cent in November compared to a decline in output by 4.6 per cent earlier
Analysts polled by Reuters had expected an annual output growth of 3.5 per cent for the month.
India's industrial output rose 6.2 per cent in October year-on-year, boosted by strong growth in the manufacturing and electricity sectors, official data released on Thursday showed.
Crude oil, fertiliser and cement recorded negative growth
According to the Central Statistical Organisation data, released earlier in the day, Index of Industrial Production grew by 16.7 per cent in January against just a per cent during the corresponding month in 2009.
What could be the reason for the successive downward revisions across the board? Some key indicators make it evident, reports Abhishek Waghmare.
The Sensex closed at 27,534 levels, down by 114 points or 0.4%.
The mismatch between PMI and core sector could also be due to the fact that while core sector is calculated year-on-year, PMI is calculated month-on-month.
"Within the broader index of industrial production, manufacturing has the largest of the weight. Having fallen off the cliff by 40.7 per cent during the April-June quarter, it is likely to witness a rebound when July IIP data is released. However, turnaround to positive growth trajectory could be some time away," Assocham said.
'Everyone confuses GDP to be a measure of output, when it is actually a measure of income.'
Leading indicators suggest economic activity has been disrupted after demonetisation.
RBI is likely to have reached broadly similar conclusions since it did cut rates, presumably to stimulate activity.
Industrial production grows at 2.1 per cent in March.
IndusInd Bank, Bharti Airtel, HUL, M&M, Tata Steel, PowerGrid and Tech Mahindra too ended with gains on the BSE.
Month-on-month stats show industrial output shrank 4 times till Oct in 2011-12.
Output of the manufacturing sector, which constitutes over 75 per cent of the index, rose 8.5 per cent in January, compared to 8.1 per cent in the same month last year.
n the broader market, BSE Midcap and Smallcap indices are trading higher by 0.3% each.
Key share indices ended over 1 per cent higher on Tuesday led by rate sensitive shares as the sluggish April IIP data re-inforced market expectations that the central bank could cut key policy rates and also lower the cash reserve ratio to boost growth.
Industrial production is expected to dip marginally in the next 3 months due to rupee gaining strength against the dollar and declining non-food credit, even as petrol and diesel might become cheaper, the Institute of Economic Growth said.
India's index of industrial production rose by 6.4 per cent in February over the same period a year earlier, the government said on Thursday.
The manufacturing sector, which constitute more than 77 per cent of the index, recorded a growth of 5.2 per cent in April, up from 2.9 per cent in the year ago month.
Industrial production growth slowed down to five-month low of 0.4 per cent in August mainly due contraction in manufacturing output and lower offtake of consumer goods.
Industrial growth in the country revived moderately to 8.8 per cent in June this year on the back of a smart recovery in the manufacturing sector and better offtake of capital goods.
The greatest disconnect lies in the estimates of industrial growth.
India's current account surplus moderated to $15.5 billion or 2.4 per cent of the GDP in the July-September quarter of the current fiscal, the RBI said on Wednesday. The same was at $19.2 billion or 3.8 per cent of the GDP in the preceding three-month period on account of a rise in the merchandise trade deficit, the RBI said in a statement on 'Developments in India's Balance of Payments during the Second Quarter (July-September) of 2020-21'. It is for the third consecutive quarter that India's current account remained in surplus. In the last quarter of 2019-20, the surplus was $0.6 billion. Current account deficit/surplus reflects the difference between the outflow and inflow of foreign exchange in a country's current account.
According to the commerce and industry ministry data, during April-February 2018-19, the eight sectors recorded a flat growth rate of 4.3 per cent over the same period previous fiscal.
Coal, crude oil, natural gas, cement, and electricity recorded a negative growth of 8.6 per cent, 5.4 per cent , 3.9 per cent, 4.9 per cent and 2.9 per cent, respectively, in August.
Investors are keenly awaiting the announcement of the macroeconomic data.
Coal, crude oil, natural gas, refinery products, fertiliser, steel, cement and comprise 40.27 per cent of the weight of items included in the Index of Industrial Production.
Says sugar miscalculation behind 'one-off aberration'; Feb reading weak at 4.1%
Though the ministry is considering 2017-18 as the new base year, no decision has been taken as the committees of experts are awaiting some more data before finalising their opinion.
Trifacta's investors include Accel, Greylock Partners, Ignition and Cathay Innovation
Industrial output maintained its double digit growth for the sixth consecutive month at 13.5 per cent in March, but was lower than expected.
The output, as measured by the Index of Industrial Production, had contracted by 2.5 per cent in the same month of last year.
'While collections under the Income Disclosure Scheme explain it partly, indirect tax numbers not showing any effect of the withdrawal of high denomination currency notes was puzzling.'
© 2026 Rediff.com - Investor Information - Advertise with us - Disclaimer - Privacy Policy - Sitemap - Feedback - About us - Terms of use - Grievances