India’s industrial output up 0.1 percent in January

“The up tick in IIP numbers for the month of January 2014 at 0.1 percent from -0.2 percent in December 2013 is encouraging and it warrants economic recovery going forward,” Sharad Jaipuria, President, PHD Chamber of Commerce said in a statement here.

The growth in IIP, that has been witnessing negative trend since October 2013, has finally shown some signs of recovery in January 2014, the statement added.

The cumulative growth of the industrial production for the April-January period year-on-year was at a standstill from a growth of one percent in the corresponding period of last fiscal, according to data released by the Central Statistics Office (CSO).

Factory output measured in terms of the Index of Industrial Production (IIP) had dropped by 0.6 percent in December, registering a contraction for the third straight month.

Last month, factory output gained by 0.1 percent, from 2.5 percent in the corresponding period of last year.

However, manufacturing sector declined by 0.7 percent in the month under review from an increase of 2.7 percent in January 2013.

Industry chamber ASSOCHAM pointed out that manufacturing industry continued to register deceleration along with continued fall in the production of capital goods and consumer durables.

“The negative growth of manufacturing has got serious implications for the overall growth, employment and trade balance,” said D.S. Rawat, secretary general of ASSOCHAM.

Mining sector output in January increased by 0.7 percent from a deceleration of 1.8 percent in the corresponding period of last year.

Electricity sector output rose by 6.5 percent in January from 6.4 month in the the corresponding period of 2013.

Segment-wise growth was witnessed in steel structures (26.5 percent), cable, rubber insulated (56.6), air conditioners (32.5 percent), scooters and mopeds (23.8 percent), stainless steel (21.3 percent), and antibiotics (21.2 percent).

Segment-wise, high negative growth was reported in boilers(-50.4 percent), earth moving machinery (-45.2 percent), aluminium conductor (-43.2 percent), grinding wheels (-38.9 percent), commercial vehicles (-22.6 percent), carbon steel (-37.5 percent) and telephone instruments including mobile phones and accessories(-30.7 percent).

“The lack of depth in manufacturing has been affecting India’s economic security and stability as sustained high negative current account balances with China and other trade partners,” Rawat said.

“In view of this, ASSOCHAM strongly recommends for a paradigm shift in the government approach as cheap imports of various manufactured goods like electronics, chemicals and steel are resulting in domestic manufacturers to lower capacity utilization rates, leave alone adding new capacities,” the statement said.