Driven by the sharp decline in manufacturing, India39;s industrial output, measured by the Industrial Production Index (IIP), contracted 0.3% in December after rebounding 1.8% in November. Growth in factory production in the country has contracted in three of the past four months, suggesting a sustained slowdown in the economy. However, the most recent contraction is well below the 4.3% drop in September, the largest decline in the past eight years.
To make matters worse, Indian retail inflation based on the consumer price index (CPI) also rose for the sixth consecutive month in January, rising from 7.35% in December to 7.59%.
The day before, Indian Finance Minister Nirmala Sitharaman said the economy was not in trouble and the green shoots were visible as the country moved towards a $ 5 trillion economy.
Nirmala Sitharaman, responding to a federal budget debate in Lok Sabha on Tuesday, said: "There are seven important indicators that show that the economy has sprouts R30; the economy is not in trouble."
According to data released by the Statistics and Planning Implementation Department on Wednesday, the industrial production index for the current fiscal year fell from 4.7% in the same period of the previous fiscal year to 0.5% from April to December of the current fiscal year.
The data showed that manufacturing output shrank by 1.2%, compared with a growth of 2.9% in the same period last year. In a similar trend, power generation has also fallen by 0.1%, compared with an increase of 4.5% in December 2018.
Against the trend, output in the mining sector increased by 5.4%, compared with a drop of 1% in the same period last year.
The data emphasizes: "In terms of industries, 16 of the 23 industry categories in manufacturing experienced negative growth during December 2019 compared to the same period last year."
According to the data, “ Computer, electronics and optical products manufacturing & # 39; & # 39; industry group showed the highest negative growth at 24.9%, followed by “ machinery and equipment manufacturing & # 39; & # 39; 20.3 % And "15.5% of printed and copied & # 39; & # 39; recording media".
On the other hand, the "Basic Metal Manufacturing" industry group showed the highest positive growth at 14.2%, followed by "Wood Manufacturing and Wood and Cork Products (except Furniture)" at 13.2%. Production of straw and woven material products "and" Manufacture of leather and related products "were 5.9%.