Industrial Production Contracts 1.9% In November 2020
Industrial production in the country contracted by 1.9 per cent in November 2020, after registering a growth in October, government data showed on Tuesday, January 12. According to the Index of Industrial Production (IIP) data, the manufacturing sector output shrank by 1.7 per cent in November 2020. The mining output also contracted 7.3 per cent, while power generation grew 3.5 per cent. The IIP had grown by 2.1 per cent in the corresponding month of 2019. Industrial production has been hit due to the COVID-19 pandemic since March 2020, when the IIP declined by 18.7 per cent in the month. (Also Read: Industrial Output Snaps Recovery With 2.6% Contraction In Eight Core Sectors )
Industrial production — or the factory output — is gauged by the Index of Industrial Production (IIP) that takes into consideration, the activity recorded in sectors such as mining, manufacturing, and electricity.
According to a statement released by the government, the indices of industrial production for the mining, manufacturing, and electricity sectors for the month of November 2020 stands at 104.5, 128.4, and 144.8 respectively.Â
As per the use-based classification, the indices stand at 121.3 for primary goods, 84.6 for capital goods, 136.7 for intermediate goods, and 135.5 for infrastructure/ construction goods in the month of November 2020. The indices for the consumer durables as well as consumer non-durables stand at 115.9 and 149.1 respectively for the month.
Meanwhile, the country's output of eight core sectors — also known as infrastructural output, contracted by 2.6 per cent in November 2020, mainly due to a decline in the production of crude oil, refineries, natural gas, steel, and cement. The production of the core sectors had recorded a growth of 0.7 per cent in the corresponding month last year.Â
"It was obvious that the industrial growth will contract after the output in eight-core sector slumped. Overall the industrial recovery continues to be uneven and fragile and will require the stimulus support to stay in momentum,'' said Rahul Gupta, Head of Research — Currency, Emkay Global Financial Services.
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