IANS | 13 Jan, 2024
India's industrial growth rate slumped to an 8-month low of 2.4 per
cent in November from a 16-month high of 11.6 per cent in October, data
released by the Ministry of Statistics and Programme Implementation on
Friday showed.
In November 2022, the country’s industrial production had grown by 7.6 per cent.
The
growth rate for November was dragged down by the manufacturing sector,
which slowed to a crawl of 1.2 per cent on a year-on-year basis after
having posted an increase of 10.2 per cent in October.
The
electricity generation also grew at a slower pace of 5.8 per cent as
compared to a high double digit growth of 20.4 per cent in October.
Similarly, the mining output growth declined to 6.8 per cent from 13.1
per cent in October.
The sharp slowdown in manufacturing output
growth, which accounts for more than three-fourths of the index of
industrial production (IIP), was partly attributed to the large number
of holidays in November on account of festivals due to which the working
declined.
For April-November 2023, IIP growth now works out to
6.4 per cent which is higher than the 5.6 per cent growth in the first
eight months of 2022-23.
“Industrial output for Nov-23 has
disappointed even factoring in the impact of the festival holidays
during the month and the adverse base factor. IIP has recorded a modest
growth of 2.4 per cent YoY, the lowest print in eight months since
Mar'23," Acuite Ratings & Research's Chief Economist & Head of
Research Suman Chowdhury said
The IIP figure has been pulled down
by the manufacturing sector which posted the lowest annualised growth of
1.2 per cent in 13 months after a solid momentum in the early part of
the fiscal. While moderation in industrial activity is typically seen in
the post-festive season, this may also be an indication of an
expectation of demand slowdown in the last quarter of the fiscal, he
added.
There has also been a contraction in both consumer durables
and non-durables output in Nov-23, leading to an overall contraction of
4.2 per cent YoY in the consumer goods sector.
"Notwithstanding
the sharp downward adjustment in the IIP growth in Nov-23, the
cumulative industrial output growth in the Apr-Nov’23 period stood at
6.4 per cent and we expect that figure to be higher than 6.0 per cent
for the whole fiscal. However, the data on IIP is possibly an early
indicator of the expected moderation in growth in the fourth quarter of
FY24.
"While we have revised our GDP growth forecasts for FY24 to
6.8 per cent, we expect the growth trajectory to slow down gradually
over the next few quarters," Chowdhury added.
