NEW DELHI: India's industrial output witnessed a steep contraction by 16.7 per cent in the month of March - the sharpest fall on record so far.
This was in glaring contrast to the Index of Industrial Production (IIP) numbers a year ago in March 2019, which saw a 2.7 per cent growth.
The IIP had recorded a growth of 4.5 per cent in February 2020, a seven-month high after a period of continued slowdown.
Although many factories have already announced a cut in production due to the economic slowdown, the nationwide lockdown imposed by the government led to a complete shutdown of non-essential industrial activity in the last week of the month.
According to data released by the Ministry of Statistics and Programme Implementation, the manufacturing sector shrank by 20.6 per cent in March, against a growth of 3.2 per cent in February.
Electricity contracted by 6.8 per cent in the month, compared to a growth of 8.1 per cent in February. Mining, which witnessed a 10 per cent growth in February, did not show any movement in March. With the final figures of March, the industrial production contracted by 0.7 per cent in the full year FY20.
In terms of industries, the primary goods output contracted by 3.1 per cent in March compared to a growth of 7.4 per cent in February. Intermediate goods output growth fell by 18.5 percent against a 22.4 per cent growth in the previous month.
Capital goods saw a steep fall of 35.6 per cent, while consumer durables also contracted by 33.1 per cent.
Experts feel the worst is far from over. As April witnessed a lockdown for the whole month, the contraction is expected to be steeper.
"The picture for April would be worse with virtual nil growth in most sectors which will mean a very large dip in growth rate in manufacturing. Only some segments like food and pharma could show positive growth," Madan Sabnavis, chief economist at Care Ratings said.
Meanwhile, the MoSPI released the data with the caveat that as information flow from producing units was impacted due to the lockdown, the quick estimates released are likely to undergo revision.