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India's IIP growth slows down to 1.7% in January

With subdued performance of the manufacturing sector, especially capital and consumer goods, India industrial production measured by Index of Industrial Production (IIP) slowed down to 1.7% in January from 7.5% a year ago. As per the data released by the Central Statistics Office of the Ministry of Statistics and Programme Implementation, IIP with base 2011-12 for the month of January 2019 stood at 134.5, which was 1.7% higher as compared to the level in the month of January 2018. The cumulative growth for the period April-January 2018-19 over the corresponding period of the previous year stood at 4.4%. Meanwhile, the CSO has revised upwards the growth in IIP for December 2018 to 2.6% from the earlier estimate of 2.4%.

On the sectoral front, the growth in the manufacturing sector slowed to 1.3% in January from 8.7% in January 2018. There was also slump in the power generation segment as the expansion was almost flat at 0.8% compared to 7.6% in the year-ago month. However, the silver lining was the mining sector as it grew by 3.9% in January this year compared to 0.3% in the year-ago period. The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of January 2019 stood at 119.2, 135.6 and 150.7 respectively. The cumulative growth in these three sectors during April-January 2018-19 over the corresponding period of 2017-18 has been 3.2%, 4.4% and 5.9%, respectively.

Besides, capital goods segments, a barometer of investment, and intermediate goods segment have witnessed a contraction. The capital goods sector contracted 3.2% in January, down from a growth of 5.9% in the previous month. As per Use-based classification, the growth rates in January 2019 over January 2018 are 1.4% in Primary goods, (-) 3.0% in Intermediate goods and 7.9% in Infrastructure/ Construction Goods. The Consumer durables and Consumer non-durables have recorded growth of 1.8% and 3.8%, respectively.

In terms of industries, 11 out of the 23 industry groups in the manufacturing sector have shown positive growth during the month of January 2019 as compared to the corresponding month of the previous year. The industry group 'Manufacture of food products' has shown the highest positive growth of 17.0% followed by 16.4% in 'Manufacture of wearing apparel' and 10.4% in 'Printing and reproduction of recorded media'. On the other hand, the industry group 'Manufacture of furniture' has shown the highest negative growth of (-) 12.0% followed by (-) 9.0% in 'Manufacture of fabricated metal products, except machinery and equipment' and (-) 6.4% in 'Manufacture of paper and paper products'.

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