India's Index of Industrial Production remains negative, dips 0.5 pct in March

May 12 2014, 22:25 IST
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Analysts polled had forecast a contraction of 1.5 percent in output. (Reuters) Analysts polled had forecast a contraction of 1.5 percent in output. (Reuters)
SummaryIndia's industrial production hit by weak consumer demand, capital investments, data showed.

Showing no signs of recovery, factory production remained in negative territory for the second month in a row, contracting 0.5 per cent in March due to declining output in manufacturing, especially capital goods.

Output as measured by the Index of Industrial Production (IIP) remained almost flat in 2013-14 and declined 0.1 per cent compared with an expansion of 1.1 per cent in 2012-13. The IIP showed growth of 3.5 per cent in March 2013.

IIP data for February was revised to a contraction of 1.8 per cent as against a dip of 1.9 per cent, according to information released by the Central Statistics Office (CSO).

Factory output started to decline in October, when the IIP contracted 1.2 per cent, and continued till December. It entered the positive zone in January and slipped into negative territory again in February.

Manufacturing, which constitutes over 75 per cent of the index, declined 1.2 per cent in March against growth of 4.3 per cent a year earlier.

During the April-March period of 2013-14, the sector's output contracted 0.8 per cent compared with 1.3 per cent growth previously.

Production of capital goods, a barometer of demand, shrank 12.5 per cent, in sharp contrast to an expansion of 9.6 per cent in the same month in 2013. The segment declined 3.7 per cent in 2013-14 over a contraction of 6 per cent in the comparable period.

Overall, 12 of the 22 industry groups in manufacturing showed negative growth in March as compared to the corresponding month of 2013.

Output of consumer goods declined 0.9 per cent in March compared with growth of 1.8 per cent a year ago. During 2013-14, consumer goods output contracted 2.6 per cent against growth of 2.4 per cent in 2012-13.

The consumer durables segment contracted 11.8 per cent in March as against a decline of 4.9 per cent previously. For the entire financial year, the segment's output fell 12.2 per cent compared with an expansion of 2 per cent in 2012-13.

Production of consumer non-durables expanded 7.2 per cent compared with 7.3 per cent in March last year and for the entire financial year, it grew 5.2 per cent, at a faster pace than 2.8 per cent in 2012-13.

The intermediate goods segment expanded 0.6 per cent compared with 2.1 per cent a year earlier. During 2013-14, growth was 3 per cent against 1.6 per cent previously.

Basic goods grew 4

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