MUMBAI, July 11 (NNN-UNI) – India’s factory output contracted sharply by 34.7 percent in May to 88.4, over the same month last year, but indicated a pickup in industrial activity from the preceding month, as data released by the Ministry of Statistics and Programme Implementation, on Friday.
In Apr, the Index of Industrial Production, which measures factory output in the country, plunged by 55.5 percent to 53.6, as India was under the COVID-19-led nationwide lock-down.
“In view of the preventive measures and announcement of nationwide lock-down by the Government, to contain spread of COVID-19 pandemic, majority of the industrial sector establishments were not operating from the end of Mar, 2020 onward,” said the ministry.
“This has an impact on the items being produced by the establishments during the period of lock-down and the subsequent periods of conditional relaxations in restrictions.”
The fall in industrial production in May has been broad-based across both sectoral and use-based classification. However, the extent of negative growth under each sub-head has been lower in May from last month, reflective of graded pickup in economic activity, said a note by credit rating agency CARE.
India, ranked third after the United States and Brazil, for the number of confirmed COVID-19 cases, has been in the process of gradually relaxing its lock-down norms for resuming economic activity.
“Despite some relaxations, the lock-down still continues, so this data cannot be compared with previous months. Ever since the nationwide lock-down began, there has been an adverse impact on manufacturing, mining, infrastructure activities. Until the lock-down ends, the contraction in industrial production will continue to have a negative impact on India’s GDP,” said Rahul Gupta, head of Research Currency of Emkay Global Financial Services, a domestic stock brokerage house.– NNN-UNI
