India's industrial output contracts by 5.1 per cent in Oct
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India's industrial output shrunk by 5.1 per cent in October after witnessing a sustained slowdown over the past few months, led by a steep fall in production of almost sectors, particularly manufacturing, mining and capital goods.
Factory output, as measured by the Index of Industrial Production (IIP), had grown by 11.3 per cent in October last year.
As per data released by the government on Monday, industrial output grew by 3.5 per cent in the April-October period this fiscal, as against 8.7 per cent in the same period last year.
Output of the manufacturing sector, which constitutes over 75 per cent of the index, declined by 6 per cent in October, compared to a growth of 12.3 per cent in the same month of 2010.
In addition, mining output declined by 7.2 per cent in October this year, as against a growth of 6.1 per cent in October last year.
Production of capital goods fell sharply by 25.5 per cent in the month under review. The segment had grown by 21.1 per cent in the corresponding month of 2010.
Output of consumer goods also fell by 0.8 per cent during the month under review, as against a growth of 9.3 per cent in the corresponding month of 2010.
Furthermore, consumer durables production declined by 0.3 per cent, compared to a growth of 14.2 per cent in October last year.
During the month under review, output of consumer non-durables fell by 1.3 per cent. The segment had expanded by 5 per cent in October last year.
In a similar fashion, basic goods production witnessed a 0.1 per cent decline in October this year, as against a growth of 9.8 per cent in the same month of 2010.
Production of intermediate goods also fell by 4.7 per cent during the month, compared to a growth of 9.7 per cent in the year-ago period.
However, electricity production grew by 5.6 per cent during the month under review, as compared to 8.8 per cent growth in October, 2010.
Meanwhile, the IIP growth figure for September this year has been revised upward to 2 per cent from the provisional estimate of 1.9 per cent.
The decline in industrial production numbers, as per the latest data, suggests continued sluggishness in the economy, experts said.
Last week, the government revised its growth projection for the Indian economy in 2011-12 downward to 7.5 per cent from the earlier forecast of around 9 per cent in the pre-Budget Survey.
India's economy grew by 6.9 per cent in July-September, 2011, the slowest rate of expansion in nine quarters.
India Inc had attributed the slowdown to rising interest rates, which have led to an increase in the cost of borrowing, thus hindering fresh investment.
The Reserve Bank has hiked interest rates 13 times since March, 2010, to tame inflation. Headline inflation has been above the 9 per cent-mark since December last year.
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