Industrial output shrinks 8% in August

New Delhi: Industrial production declined by 8 per cent in August, mainly due to lower output of manufacturing, mining and power generation sectors, official data showed on Monday. According to the Index of Industrial Production (IIP) data, manufacturing sector production registered a decline of 8.6 per cent, while the output of mining and power segments fell 9.8 per cent and 1.8 per cent, respectively.

The IIP had contracted by 1.4 per cent in August 2019.

"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 of Statistics and Programme Implementation said in a statement.

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, it added.

Meanwhile, the contraction in IIP in July has been revised to (-)10.8 per cent from the (-) 10.4 per cent provisional data released last month. Similarly, May IIP has been revised marginally to 33.4 per cent contraction from 33.9 per cent decline. The decline in IIP for June remained unchanged at (-) 15.8 per cent.

The central government had imposed a lockdown to contain the spread of Covid-19 infections on March 25, 2020. The IIP had shrunk by 57.3 per cent in April as most industrial and commercial establishments remained closed. As per the latest data, the manufacturing sector, which constitutes 77.63 per cent of the IIP, recorded a decline of 8.6 per cent in August 2020, as against a contraction of 1.7 per cent in the same month last year.

Similarly, mining sector output fell 9.8 per cent as against a flat growth in August 2019. Power generation shrank by 1.8 per cent, compared to a contraction of 0.9 per cent a year ago. Output of capital goods, which is a barometer of investment, fell by 15.4 per cent in August as against a contraction of 20.9 per cent earlier.