Industrial production shrinks 0.3% in December

The Index of Industrial Production (IIP) had grown by 2.5% in December 2018.

Updated - February 12, 2020 08:34 pm IST

Published - February 12, 2020 07:11 pm IST - New Delhi

According to the National Statistical Office (NSO) data, manufacturing sector output declined by 1.2% in December 2019. File

According to the National Statistical Office (NSO) data, manufacturing sector output declined by 1.2% in December 2019. File

India’s industrial production growth turned negative in December, contracting by 0.3%, mainly on account of a decline in manufacturing sector output, official data showed on Wednesday.

Factory output, as measured in terms of the Index of Industrial Production (IIP), had recorded a growth of 2.5% in December 2018.

Industrial production growth had turned positive at 1.8% in November last year after contracting for three consecutive months of August (-1.4%), September (-4.6%) and October (-4%).

According to the National Statistical Office (NSO) data, the manufacturing sector output contracted by 1.2% in December 2019 as against a growth 2.9% in the same month last year.

Electricity generation also fell by 0.1% as against a growth of 4.5% in December 2018.

Mining sector output grew by 5.4% in the month under review, compared to a contraction of 1% in the year ago month.


IIP growth during April-December period of the current fiscal came in at 0.5%, down from 4.7% in the same period of 2018-19.

Data for the December month further revealed that production of capital goods, a barometer of investment, slumped by 18.2% compared to a growth of 4.2% in the corresponding month of the previous year.

As per use-based classification, the growth rates in December 2019 over December 2018 were 2.2% for primary goods, 12.5% for intermediate goods and (-) 2.6% for infrastructure/construction goods.

Consumer durables and non-durables recorded growth of (-) 6.7% and (-) 3.7% respectively.

In terms of industries, 16 out of the 23 industry groups in the manufacturing sector have shown negative growth during December 2019 as compared to the corresponding month of the previous year.

Commenting on the IIP data, Rumki Majumdar, Economist, Deloitte India, said, “The contraction in the IIP in December raises concerns about the sustainability of the green shoots in industrial activities that were visible till last month. This does not bode well for the overall economy as global headwinds already pose significant challenges to overall industries.”

“The large outbreak of the coronavirus in China can adversely impact India as China is one of the largest trading partners. With several factories being closed down in China temporarily, the electronics and auto industry in India will likely be hit because of their dependence on Chinese imports of components and raw materials,” Majumdar added.

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