Industrial production grew a meagre 1.2% in July from 4.5% a year ago, bearing the brunt of a dismal show of the manufacturing sector — especially that of capital goods — putting pressure on the Reserve Bank of India (RBI) to lower rates further.
Factory output measured in terms of index of industrial production had declined by 0.2% in June, according to revised estimates released by the Central Statistics Office (CSO) on September 12.
During April-July, IIP grew by 1.7%, down from 6.5% in the same period last year.
Growth of the manufacturing sector, which makes up 77.6% of the index, decelerated sharply to 0.1% in July compared to 5.3% in the same period of 2016.
Output of capital goods — a proxy for infrastructure investments in the country — contracted 1% in July as against a growth of 8.8% in the year-ago period.
Consumer durable goods met with similar fate, with production declining 1.3% as against a nominal growth of 0.2% a year earlier.
However, electricity generation stood out as it posted a growth of 6.5% in July, up from 2.1% in July 2016. Mining output too expanded by 4.8%, as against 0.9% in the year-ago month.
In terms of use-based classification, growth rates in July 2017 over the same month last year stood at 2.3% for primary goods, (-)1.8% for intermediate goods and 3.7% for infrastructure and construction goods.
Consumer non-durables have recorded a growth of 3.4%.
A total of eight out of 23 industry groups in the manufacturing sector grew in July 2017 compared to the corresponding month last year.
