India's industrial output falls to 0.1%

India's industrial production growth rate slowed to just 0.1 per cent cent in July due to poor show by manufacturing, mining and capital goods sectors, reflecting weak economic activity which may prompt RBI to cut interest rate in its mid-quarter policy review on Monday.

Industrial output in the April-July period of this fiscal has thus contracted by 0.1 per cent, according to the official data released on Wednesday.

Growth in factory output, as measured by the index of industrial production (IIP), was 3.7 per cent in July last year, and 6.1 per cent in the April-July period in 2011-12.

The manufacturing sector, which constitutes over 75 per cent of the index, witnessed a contraction in output by 0.2 per cent in July, as against growth of 3.1 per cent in the same month last year.

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The performance of the manufacturing sector in April-July was poor as output contracted by 0.6 per cent, as against a growth of 6.5 per cent in the four-month period of last year.

The capital goods production also down by 5 per cent in July against a contraction of 13.7 per cent in the same month a year ago.

The output of capital goods contracted in April-July period by 16.8 per cent, as against a growth of 8.2 per cent in 2011-12.

Mining output in July dipped by 0.7 per cent, as against a growth of 0.7 per cent in the same month a year ago. The sector's production in April-July quarter declined by 0.9 per cent, compared to a growth of 0.6 per cent in 2011-12.

Consumer goods production was up 0.7 per cent in July as compared to 6.4 per cent growth in the same month last year.
During the April-July period of this fiscal, the growth in the segment was 3.3 per cent, compared to 4.9 per cent in the four month period a year ago.

In all, only 8 of the 22 industry groups in the manufacturing sector showed positive growth in July.

Consumer durables production showed a decline in growth rate as this segment increased by 1.4 per cent in July, compared to 9 per cent in the same month last year. The output

of these goods registered a growth of 6.3 per cent in April-July quarter this fiscal, as against 4.3 per cent in the same period in 2011-12.

The consumer non-durables output growth declined to 0.1 per cent in July, as against a growth of 4.1 per cent in the same month last year. This segment grew by 0.7 per cent in first four months of this fiscal as against 5.5 per cent in 2011-12.

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The basic goods production growth slowed to 1.5 per cent in July, compared to 10 per cent a year ago. During April- July period, this segment recorded a growth of 3 per cent compared to 8.1 per cent in the four months of last fiscal.

Power generation too witnessed a dip in growth rate as it declined to 2.8 per cent during July, compared to 13.1 per cent in the same month a year ago.

Electricity generation increased by 5.5 per cent in the April-July period of this fiscal, as against 9.4 per cent in the same period in 2011-12.