NEW DELHI: In the sharpest contraction on record so far, India’s industrial output shrunk by 16.7 per cent in March 2020, shows government data.
The Index of Industrial Production, or IIP, had recorded 2.7 per cent growth in March last year; the index had grown 4.5 per cent in February 2020, a seven-month high after after a period of continued slowdown.
While several factories had already announced production cuts due to the economic slowdown, the nationwide lockdown imposed by the Centre to fight the virus outbreak meant a complete shutdown of non-essential industrial activities in the last week of March.
According to data released by the Ministry of Statistics and Programme Implementation, the manufacturing sector shrank by 20.6 per cent in March 2020, against 3.2 per cent growth in February this year.
Growth in electricity output contracted by 6.8 per cent during the month under review, compared to a growth of 8.1 per cent in February. Mining, which witnessed 10 per cent growth in February, did not show any movement in March. Adding in the final figures of March, the data shows that industrial production contracted by 0.7 per cent during the full FY 2019-20.
In terms of industries, primary goods output contracted by 3.1 per cent in March 2020, compared to 7.4 per cent growth in February. Intermediate goods output growth fell by 18.5 per cent in March against 22.4 per cent in the previous month. Capital goods saw a steep fall of 35.6 per cent, while consumer durables sector also contracted by 33.1 per cent.
However, the industry analysts feel that the worst is far from over. With a lockdown for the whole month of April, the contraction in industrial production for the month is expected to get steeper.
“The picture for April would be worse, with virtually nil growth in most sectors, which will mean a very large dip in the manufacturing growth rate. Only some segments such as food and pharma could show positive growth,” said Madan Sabnavis, chief economist at Care Ratings.
