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India’s factory output growth flat, retail inflation up

India’s factory output growth flat, retail inflation up

factoryNew Delhi (IANS) India’s factory output growth turned flat in March after rising during the month before, even as the annual retail inflation for April rose to 5.39 percent from 4.83 percent in March, official data showed on Thursday.

The factory output for February, based on the index of industrial production, which had turned positive at 2 percent, after two straight months of decline, rose negligibly by 0.1 percent in March, as per data released by the Central Statistics Office.

As regards annual retail inflation, based on consumer price index, the rise came after two straight months of decline. The inflation rates for the preceding three months were 4.83 percent for March, 5.26 percent for February and 5.69 percent for January.

At the same time, the annual food inflation rose sharply to 6.32 percent from 5.21 percent. This apart, the annual retail inflation in the rural economy was relatively higher at 6.09 percent, against 4.68 percent in the urban areas.

Worryingly for industry, the index for manufacturing, which has the maximum weight in the overall index, actually fell by 1.2 percent in the month under review. While the index for mining also fell, albeit marginally by 0.1 percent, that for electricity grew by a robust 11.3 percent.

Around the same time last month, there was much to cheer as official data forecast the rains during the upcoming monsoon season to be above normal, and that retail inflation fell to a six-month low while factory output rose after three months of decline.

India’s factory output declines again in January

India’s factory output declines again in January

factory outputNew Delhi : (IANS) India’s factory output  declined again in January, by (-) 1.53 percent, dipping further from the (-) 1.18  percent fall logged in December, official data showed on Friday.

In comparison, there was a growth of 2.8 percent in January 2014.

The negative show for the third straight month was due mainly to the manufacturing sector, while India Inc reiterated its demand for a rate cut by the Reserve Bank of India.

As per data on index of industrial production (IIP) released by the Central Statistics Office, the country’s factory output logged a cumulative growth of 2.7 percent rise in the first 10 months of the current fiscal, while cumulative growth during the corresponding period of last fiscal stood at 2.6 percent.

“The general index for January 2016 stands at 186.3, which is 1.5 percent lower, as compared to the level in January 2015. The cumulative growth for the period April-January 2015-16 over the corresponding period of the previous year stands at 2.7 percent,” an official statement  said.

The January IIP was dragged lower by a (-) 2.8 percent drop in  manufacturing activity. Between the other broader indices, electricity production rose by 6.6 percent, while that for mining was up by 1.2 percent.

The high negative contributors to the dip in the overall index included cables, insulated rubber, antibiotics, stainless and alloy steels, sponge iron and passenger cars.

Electricity, commercial vehicles, mobile phones, cement and gems and jewellery were positive contributors.

“In  terms of industries, 10 out of the 22 groups in the manufacturing sector have shown negative growth during January 2016 as compared to the corresponding month of the previous year,” said the statement.

Looking further at the use-based classification of six industries, the index for capital goods was down as much as 20.4 percent, while that for consumer non-durables was down 3.1.  Consumer goods sub-index remained unchanged.

However, basic goods, intermediate goods and consumer durables recorded gains of 1.8 percent, 2.7 percent and 5.8 percent, respectively.

Reacting to the latest data, Indian industry repeated its call for a rate cut by the central  bank.

“The growth in manufacturing sector remains fragile as evident from the fall in manufacturing index for the last three consecutive months. The delay in the recovery of manufacturing is going to impact the overall economic growth,” A. Didar Singh, secretary general, FICCI, said in a statement.

 

“While the budget has tried to address tax related issues for manufacturing and we are hopeful that they would yield results, but we hope to see further rate reduction in the forthcoming monetary policy that can stimulate demand and investments in the economy to support manufacturing growth,” he added.