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Industrial output contracts 1.1% in August; manufacturing shrinks

12 October 2019

Factory output, which is measured by the index of industrial production (IIP), contracted in March 2019.

According to data from the Ministry of Statistics and Program Implementation (MOSPI), industrial growth, as indicated by the Index of Industrial Production (IIP), contracted by 1.1 per cent in August, against 4.6 per cent growth in July and 4.8 per cent growth in August 2018.

The figures released by the government on Friday suggested that the industrial output declined by 1.1 per cent in August due to dismal performance by several sector including manufacturing, power generation and mining sectors.

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Consumer non-durables grew 4.1 percent in August against a 6.5 percent growth for the same period a year ago.

NDTV is one of the leaders in the production and broadcasting of un-biased and comprehensive news and entertainment programmes in India and overseas. Intermediate goods showed a growth of 7 per cent, whereas infrastructure and construction goods declined by 4.5 per cent. Consumer durables showed a decline of 9.1 per cent, while consumer non-durables grew by 4.1 per cent. Collections from India's nationwide goods and services tax (GST) fell to a 19-month low in September, while direct tax collection growth since the beginning of the current fiscal stands at 6% so far, below the required growth rate of 17%. This is the first contraction after June 2017. The previous low in IIP was -1.7 per cent, in November 2012. "The cumulative growth for the period April-August 2019 over the corresponding period of the previous year stands at 2.4 percent", the release from the ministry said.

India's industrial output shrank at its fastest rate in more than six years in August, reflecting the impact of an economic slowdown that could prompt the central bank to cut its key policy rate for the sixth time in December.

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Earlier this year, the International Monetary Fund cut India's gross domestic product growth forecast for 2019-20 by 20 basis points to 7.3 percent, followng similar action by the Asian Development Bank and the Reserve Bank of India (RBI).

The index declined 0.9% year-on-year for the electricity sector and 1.2% for the manufacturing sector.

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Industrial output contracts 1.1% in August; manufacturing shrinks