Industrial output contracts 10.4% in July

Industrial output, measured via Index of Industrial Production (IIP), contracted 10.4 per cent on annua basis in the month of July, government data released on Friday showed. The government stated that industrial activity is resuming with lockdown restrictions being lifted across the country.

"In view of the preventive measures and announcement of nation-wide lockdown by the Government to contain spread of COVID-19 pandemic, a large number of the industrial sector establishments were not operating from the end of March, 2020 onwards. This has had an impact on the items being produced by the establishments during the period of lockdown. With the lifting of restrictions in the subsequent periods, industrial activity is resuming. The Index for the month of July 2020 stands at 118.1 as compared to 54.0, 89.5 and 108.9 for April 2020, May 2020 and June 2020," said the Ministry of Statistics and Programme Implementation.

Mining and manufacturing activities recorded 13 per cent and 11 per cent decline, respectively during July, data from National Statistical Office showed, while electrcity generation fell 2.5 per cent as power demand improved.

In the manufacturing sector, 'Manufacture of pharmaceuticals, medicinal chemical and botanical products' was the only segment that showed growth in production at 22 per cent. The biggest decline in output was recorded in 'Manufacture of paper and paper products' at 37.6 per cent, followed by 'Manufacture of beverages' which showed output decline of 33.5 per cent.

On use-based classification, primary goods, capital goods and intermediate goods saw factory output decline of 10.9 per cent, 22.8 per cent and 12.5 per cent, respectively. Infrastructure and construction goods reported a decline of 10.6 per cent in industrial production. Production of consumer durables and consumer non-durables shrank 23.6 per cent and 6.7 per cent, respectively.

ALSO READ: $23 billion incentive programme in the works to boost manufacturing in India

ALSO READ: COVID-19 crisis likely to force India to borrow more, deficit monetisation last resort