July IIP falls 10.4% on lower manufacturing, mining output

Industrial activity seems to be picking up gradually as India comes out of the lockdown imposed to contain the spread of COVID. The index of industrial production (IIP) fell by 10.4 per cent July, an improvement over the 15.77 per cent contraction in June, data released by the Ministry of Statistics and Programme Implementation (MoSPI) showed.

The IIP’s fall to 118.1 for the month of July was mainly due to lower output in manufacturing, mining and power generation.

Manufacturing in July contracted by 11.1 per cent year on year, while mining was down 13.0 per cent and electricity fell 2.5 per cent.

The fall comes amid the GDP for the first quarter of the current fiscal falling by 23.9 per cent.

The output of capital goods, which reflects the investments being made, was down by 22.8 per cent in July, against a fall of 7 per cent a year ago. The production of consumer durables was down 23.6 per cent, while that of consumer non-durables grew 6.7 per cent.

The fall in IIP was mainly due to a large number of industrial units remaining shut from March end due to the COVID lockdown, the Ministry said.

It “may not be appropriate to compare the IIP in the post pandemic months with the IIP for months preceding the COVID 19 pandemic,” the ministry said, adding industrial activity is resuming with the lifting of restrictions.

With the 10,4 per cent contraction in July, IIP for the current fiscal so far (from April to July) is down by 29.2 per cent, according to the data.

IIP fell by 15.77 per cent in June, 33.8 per cent in May, and a record 57.6 per cent in April due to the complete lockdown.

The ministry has revised the IIP data for June to a fall of 15.77 per cent from the provisional estimates of 16.6 per cent issued last month.