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India's IIP growth slows down to 4.4% in March

With contraction in capital goods segment and sluggish growth in mining sector, India's industrial production measured by Index of Industrial Production (IIP) slowed down to 4.4% in the month of March 2018, as compared to 7.1% growth recorded in previous month. This is the first time in four months that the IIP recorded less than 7% growth. Besides, the industrial output index grew by 4.4% in March 2017.

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 2018, stood at 139.0, which is 4.4% higher as compared to the level in the month of March 2017. The cumulative growth for the period April-March 2017-18 over the corresponding period of the previous year stood at 4.3% lower than 4.6% in the previous fiscal.

On the sectoral basis, the manufacturing segment, which constitutes the bulk of the index at 77.6%, saw sharp slowdown in March 2018 at 4.4% as compared to 8.7% in February. In March last year, manufacturing growth came in at 3.3%. However, mining recorded sharp fall in growth at 2.8% as compared to 10.1% growth in same month last year, while it had contracted 0.3 percent in February 2018. Besides, electricity sector recorded 5.9% growth in March 2018 as compared to 6.2% in same month last year, while, in February 2018, electricity sector grew 4.5%. The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of March 2018 stand at 131.3, 138.6 and 156.7 respectively. The cumulative growth in these three sectors during April-March 2017-18 over the corresponding period of 2016-17 has been 2.3%, 4.5% and 5.4% respectively.

On the other hand, capital goods output, a proxy to measure private sector investment activity, contracted by 1.8% during March as compared to a growth of 9.4% in the corresponding period last year. However, consumer durables output showed an increase of 2.9% as against decline of 0.6% in March 2017. The consumer non-durables segment showed an impressive growth of 10.9% in March as against 7.5% in corresponding month last year. As per Use-based classification, the growth rates in March 2018 over March 2017 are 2.9% in Primary goods, 2.1% in intermediate goods and 8.8% in Infrastructure/ Construction Goods. 

In terms of industries, 11 out of the 23 industry groups in the manufacturing sector have shown positive growth during the month of March 2018 as compared to the corresponding month of the previous year. The industry group 'Manufacture of furniture' has shown the highest positive growth of 41.5% followed by 20.6% in 'Manufacture of food products' and 17.2% in 'Manufacture of motor vehicles, trailers and semi-trailers'. On the other hand, the industry group 'Other manufacturing' has shown the highest negative growth of (-) 30.7% followed by (-) 20.6% in 'Manufacture of tobacco products' and (-) 18.6% in 'Manufacture of wearing apparel'.

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