Industrial production came in at -0.1 per cent for March compared to 0.1 per cent in February.

India’s industrial output declined by 0.1% in March, hitting a 21-month low, due to contraction in manufacturing, capital goods and consumer durables, official data showed. Manufacturing, which constitutes 77.63% of the Index of Industrial Production (IIP), shrank 0.4% in the month. The previous low for IIP was a 0.3% decline in June 2017. For the full year to March, factory output growth was at a three-year low of 3.6%, down from 4.4% in FY18, according to official data released by the Central Statistics Office on Friday. It also revised IIP growth for February down to 0.07% from 0.1% earlier. On a quarterly basis, this was one of the lowest average growth figures at 0.46% since the government revised the base year of the index to 2011-12 from 2004-05. Average growth in the July-September quarter of FY13 was 0.1%. “Manufacturing, capital goods and consumer goods are a problem area. Also, if capacity utilisation has increased, then it is not getting reflected in the production numbers,” said MadanSabnavis, chief economist at CARE Ratings. Electricity generation slowed to 2.2% in March from 5.9% in the year earlier and mining to 0.8% from 3.1%. Passenger vehicle sales declined 17% in April, underscoring the slump in demand and putting revival measures at the top of the next government’s immediate agenda.

However, growth in eight core infrastructure industries hit a five month high of 4.7% in March on the back of strong output in coal and cement. The core sector has a 40.27% weight in IIP. Growth in the infrastructure and construction sector came in at 6.4% in March over the high base of 9.1% in the corresponding period last year. Capital goods output, a proxy for investment activity, contracted a sharp 8.7% compared with a 3.1% decline a year earlier. “Capital goods have contracted consecutively for three months during January-March 2019 after May-July 2017,” said Devendra Kumar Pant, chief economist, India Ratings. Consumer durables output, an indicator of urban demand, fell 5.1%, compared with 6.2% growth in March last year. There was growth in 12 of the 23 industry groups in the manufacturing sector. As per Pant, declining growth of primary goods and deepening contraction of intermediate goods along with weakness in both investment and consumption activities suggests fragile industrial activity in the near term.