SME Times News Bureau | 11 Nov, 2019
India's September factory output declined (-) 4.3
per cent in September from (-) 1.40 per cent in August 2019, according to
official data released by Ministry of Statistics & Programme Implementation.
On a year-on-year basis, the growth rate of factory
output during the month under review was lower than the 4.6 per cent recorded
during September 2018.
"The Quick Estimates of IIP with base 2011-12
for the month of September 2019 stands at 123.3, which is 4.3 per cent lower as
compared to the level in the month of September 2018," the Ministry of
Statistics & Programme Implementation said.
"The cumulative growth for the period April-September 2019 over the
corresponding period of the previous year stands at 1.3 per cent," it
As per the data, the output rate of the manufacturing sector contracted by (-)
3.9 percent in September from a YoY rise of 4.8 per cent.
Similarly, other notable sectors such as mining and electricity saw a decline
According to the data, mining activity declined by 8.5 per cent from a flat
growth of 0.1 per cent and the sub-index of electricity generation was lower by
(-)2.6 per cent from 8.2 per cent.
According to ICRA's Principal Economist Aditi Nayar: "The industrial
performance in September stood out as the worst YoY performance in the current
series. Moreover, the lead indicators point to a continued weakness in October,
which, coupled with an unfavourable base effect, may well result in a further
deterioration in the just-concluded month."
India Ratings & Research's Chief Economist Devendra Kumar Pant said:
"This is the first time after November 2012 that all three broad based
sectors have contracted and it is the lowest monthly growth in the 2011-12 base
"In the old base year (2004-05), IIP in October 2011 contracted by 5 per
cent. On quarterly basis, Q2 FY20 IIP contracted by 0.4 per cent, the lowest
quarterly in 2011-12 base... IIP has been very volatile and the small momentum
of couple of months fizzles out soon. The Indian economy is presently facing a
structural growth slowdown originating from declining household savings rate
and low agricultural growth."
Emkay Wealth Management's Head of Currency Rahul Gupta said: "The
persistent slowdown in industrial growth may force the RBI to go for another
round of policy rate cut. However, a possible rise of headline inflation above
the medium term target of RBI (4 per cent) may act as a point of caution before
the RBI goes for a rate cut."
Brickwork Ratings Chief Economic Advisor M. Govinda Rao said: "The decline
in the IIP for the month of September does not come as a surprise. This calls
for immediate intervention by the government. Specifically, the time is
opportune for the government to increase public spending financed by actively
pursued strategic disinvestment."