June factory output revives a tad but continues to dip in double-digits
NEW DELHI: India’s industrial production remained in the negative zone, contracting by 16.6 per cent in June. However, the fall was not so as steep compared to the last few months, showing signs of recovery. In May, the IIP numbers had contracted by 34 per cent.
Data released by the Ministry of Statistics and Programme Implementation (MOSPI) showed, manufacturing, mining and power generation continue to drag down the overall numbers. Mining sector shrank by 19.8 per cent while manufacturing and electricity shrank 17.1 per cent and 10 per cent, respectively.
That apart, contraction in the consumer durables and capital goods segment was 35.5 per cent and 36.9 per cent, respectively during June, while consumer durable saw growth of 14 per cent. “With lifting of restrictions in the subsequent periods, industrial activity is resuming. The Index for the month of June stands at 107.8 as compared to 53.6 and 89.5 for April and May,” MOSPI said in a statement, with a note that the data is not comparable with previous months.
Economists, however, said that the numbers should be taken with caution although it indicates improvement. “We continue to caution that pent-up demand contributed to the improved performance of
certain categories of manufacturing in June-July, which may not sustain in August especially in light of the extension of localised lockdowns in various states,” said Aditi Nayar, principal economist, ICRA. The
IIP for April-June period has contracted by 35.9 per cent.