Factory output grows 1% in December, enters positive zone

New Delhi: Industrial production grew by 1 per cent in December, entering the positive territory after a gap of one month, mainly due to better performance of the manufacturing sector, official data showed on Friday.

The manufacturing sector -- which constitutes 77.63 per cent of the index of industrial production (IIP) -- recorded a growth of 1.6 per cent in December 2020, as per the data released by the National Statistical Office (NSO).

Mining sector output declined by 4.8 per cent in December 2020. However, power generation grew by 5.1 per cent. The index had grown by 0.4 per cent in December 2019. The industrial production had plunged 18.7 per cent in March last year following the Covid-19 outbreak and remained in the negative zone till August 2020.

With the resumption of economic activities, factory output posted growth of one per cent in September. The IIP had grown by 4.2 per cent in October. In November 2020, the factory output contracted by 2.1 per cent, a tad higher than the provisional estimates of 1.9 per cent decline. The government had imposed a lockdown to contain the spread of Covid-19 infections on March 25, 2020. With the gradual relaxation of restrictions, there has been a relative improvement in the economic activities by varying degrees as well as in data reporting, the Ministry of Statistics and Programme Implementation had said in a statement issued in November.

The ministry had also given a disclaimer that it may not be appropriate to compare the IIP in the post-pandemic months with the data for the months preceding the Covid-19 outbreak.

The manufacturing sector had recorded a contraction of 0.3 per cent in December 2019. Mining sector output increased by 5.7 per cent, but electricity generation shrank by 0.1 per cent in December 2019. The output of capital goods, which is a barometer of investment, rose by 0.6 per cent in December 2020 as against a contraction of 18.3 per cent. Consumer durables output surged by 4.9 per cent, compared to 5.6 per cent contraction in December 2019. Consumer non-durable goods production grew by two per cent, compared to a contraction of 3.2 per cent a year ago. The IIP for the April-December period has contracted by 13.5 per cent, according to the data. It had registered a flat growth of 0.3 per cent during the same period last fiscal.

Inflation eases 4.06% in Jan RETAIL inflation eased to 4.06 per cent in January, mainly on account of a decline in vegetable prices, as per government data released on Friday.

The inflation based on Consumer Price Index (CPI) was 4.59 per cent in December 2020. The rate of price rise in the food basket was 1.89 per cent in January, significantly down from 3.41 per cent in December, revealed the data released by the National Statistical Office (NSO). The Reserve Bank, which mainly factors in the retail inflation while arriving at its monetary policy, has been asked to keep CPI inflation at 4 per cent (+,- 2 per cent).