India’s industrial production growth rate contracted by 1.9pc in November from the prior year, , according to official estimates. Industrial production slowed after expanding by 3.6pc in October driven by pent-up and festive demand.
In November, Index of Industrial Production (IIP) stood at 126.3. The sub-indices for mining, manufacturing and electricity sectors were at 104.5, 128.4 and 144.8, respectively. Manufacturing output, which contributes three-fourths of the entire index, de-grew by 1.7pc in November from a year ago, while mining fell by 7.3pc, electricity output grew by 3.5pc.
Production of base metals grew by 1.2pc in November from a year ago, while it fell by 14.1pc in the Apr-Nov period. Manufacturing of fabricated metal products (except machinery and equipment) grew by 2.1 from the prior year and dropped by 23.2pc in the Apr-Nov period.
Infrastructure and construction goods output improved by 0.7pc, while manufacturing of motor vehicles, trailers, semitrailers was up by 0.9pc in November from a year ago. In the Apr-Nov period motor vehicle manufacturing was cumulatively down by 34.9 pc from the prior period.
India’s central bank has ensured the industry that it will maintain low-interest rate and easy liquidity policy until the economy recovers fully from the impact of the COVID-19 pandemic. Businesses are hopeful of better revenues in the March quarter amid recovering consumption and preparations for the roll-out of COVID-19 vaccination across India. The upcoming budget on Feb 1 is also expected to announce new reforms and government spending to spur economic activities.