Post-GST momentum wasn’t sustained.
New Delhi: India’s industrial output grew slowly at 3.8 per cent in September due to subdued performance of the manufacturing sector and contraction in output of consumer durables.
Industrial production measured in terms of the Index of Industrial Production (IIP) had grown by 4.5 per cent in August 2017 and 5 per cent in September 2016.
Industrial production grew at mere 2.5 per cent in the current fiscal till September compared to 5.8 per cent in last year.
As per the data, manufacturing sector, which accounts for 77.63 per cent of the index, slowed to 3.4 per cent, from 5.8 per cent a year earlier.
During H1FY18, manufacturing grew at 1.9 per cent, down from 6.1 per cent in the same period last fiscal. Consumer durable goods output contracted by 4.8 per cent in September as against a growth of 10.3 per cent in the previous year.
Electricity generation growth slipped to 3.4 per cent in September compared to 5.1 per cent a year before.
Mining, however, recorded a growth of 7.9 per cent in the month under review as against a contraction of 1.2 per cent a year ago.
According to the use-based classification, growth rates in September 2017 came in at 6.6 per cent for primary goods, 7.4 per cent for capital goods, 1.9 per cent for intermediate goods and 0.5 per cent for infrastructure/construction goods compared to the last year.
The consumer non-durable segment recorded a growth of 10 per cent.
In terms of industries, 11 out of 23 industry groups in the manufacturing sector have shown positive growth in September 2017 as against the last year.
“The momentum of post-GST restocking recorded in August 2017 did not sustain in the subsequent month, despite the impending festive season. Although the initial print for September 2017 IIP growth has trailed our expectation (4.5 percent), the disaggregated data is less disconcerting, particularly given the healthy growth recorded by consumer non-durables, primary goods and capital goods,” said Aditi Nayar, principal economist at Icra.
She also said that weak print for infrastructure/construction goods is unsurprising.