New Delhi, Oct 10 (IANS): Industrial activity, measured in terms of the Index of Industrial Production (IIP), grew marginally by 0.4 percent in August over the same month of the previous year, government data released Friday showed.
The August industrial growth compared unfavourably with the 0.5 percent recorded in the previous month, the Central Statistics Office data showed.
The cumulative growth for April-August 2014-15 over the corresponding period of the previous year stands at 2.8 percent.
The Confederation of Indian Industry (CII) said that there is a need for taking cognisance of the slow growth of industrial production and take steps to revive investment and stimulate demand in the economy.
"The IIP data shows that industrial production continues to be in the slowdown phase and a visible turnaround in industrial growth is still not happening. And if we factor in the base effect, the performance of industry shows that demand is yet to show distinct signs of a pick-up," said Chandrajit Banerjee, director general, CII.
"What is worrisome is the poor performance of the manufacturing sector which continues to be under stress as new orders are not forthcoming in a big way. The negative growth of the capital and consumer goods sector, especially consumer durables, need interventions."
On the other hand, Federation of Indian Chambers of Commerce and Industry (FICCI) said that the remedy to slowdown are bold reforms in the regulatory environment.
“Negative manufacturing growth reinforces the belief that fall in manufacturing growth has not yet bottomed out. It is more worrisome to see negative growth in consumer and capital goods especially when we were hoping the demand to pick up.” said A. Didar Singh, secretary general, FICCI.
ZyFin Research's chief economist Debopam Chaudhuri said: “The IIP data is indeed disappointing and we sincerely hope for an upward revision to be announced in coming months. It is really surprising that despite core sector and intermediate sectors of the economy performing reasonably well, the IIP data was this weak."
The July industrial activity had also gown at a snails pace at 0.5 percent. The cumulative growth for April-July 2014-15 over the corresponding period of the previous year stands at 3.3 percent.
The drop in July was mainly attributed to the lower output in consumer goods.
The drop in August is mainly due to the downfall in manufacturing and consumer durables like radio, TV, communication equipment, computers and electricity machinery.
Consumer durables output contracted by 15 percent year-on-year, while capital goods, fell 11.3 percent and consumer goods output declined by 6.9 percent. Basic goods, however, grew 9.6 percent compared to 0.9 percent month-on-month.
While manufacturing activity contracted 1.4 percent, as against a negative growth of 0.2 percent in the previous month, the mining sector recorded 2.6 percent increase versus deceleration of 0.9 percent.
The cumulative growth during April-August 2014-15 over the corresponding period of 2013-14 has been 2.5 percent in mining, 1.8 percent in manufacturing and 11.7 percent in electricity.
However, eight core industries such as coal, electricity, crude oil, cement and steel, had grown by 5.8 percent in August, compared to 4.7 percent during the corresponding month of last year.
Segment-wise growth was witnessed in stainless steel (160.8 percent), sealed compressors (121.1), air conditioners (80.1 percent), scooters and mopeds (32.1 percent), three-wheelers (31.3 percent), and plastic machinery moulding machines (59.4 percent).
Segment-wise, high negative growth was reported in boilers(-32 percent), sugar machinery (-33.6 percent), aluminium conductor (-43.2 percent), generators (-51.3 percent), computers (-49.3 percent), steel structures (-22.6 percent) and telephone instruments including mobile phones and accessories(-57.2 percent).