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The decline in the India's industrial production for August 2024 is mainly due to base effects and heavy rainfall, which impacted key sectors, highlighted a report by SBI.
The report noted that the Index of Industrial Production (IIP) recorded a marginal contraction of 0.1 per cent year-on-year, a stark contrast to the robust 10.9 per cent growth seen in the same period last year. This decline in growth is attributed to last year's strong performance, creating a high base that makes this year's growth appear weaker. "Due to base effects, India's IIP growth contracts to 0.1 per cent YoY in August, compared to last year growth of 10.9 per cent" said the report. The Ministry of Statistics & Programme Implementation on Friday released the data for the Industrial Production. The ministry also noted that the heavy rains in August also contributed to the decline, particularly in the mining sector, which contracted by 4.3 per cent. The downpour disrupted mining activities, dragging the overall industrial output lower. "It is likely that the decline in the growth of Mining sector is due to heavy rainfall in the month of August 2024" said the ministry. On the other hand, as per the data manufacturing, the largest component of the IIP, managed to grow by 1 per cent, while electricity production saw a drop of 3.7 per cent, adding to the overall weakness. In July 2024, the IIP had recorded a 4.7 per cent growth, but the August figures show a clear slowdown. The Quick Estimates of IIP for August 2024 stood at 145.6, slightly lower than 145.8 recorded in the same month last year. Among the manufacturing sector's contributors, positive growth was seen in key industries. "Manufacture of basic metals" grew by 3.0 per cent, "Manufacture of electrical equipment" surged by 17.7 per cent, and "Manufacture of chemicals and chemical products" saw a 2.7 per cent rise, helping to cushion the overall fall in industrial activity. (ANI)
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