Industrial production grows by 1% in December, manufacturing grows 1.6%

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

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

Mining sector output declined by 4.8% in December 2020. However, power generation grew by 5.1%. The index had grown by 0.4% in December 2019.

The industrial production had plunged 18.7% 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% in October. In November 2020, the factory output contracted by 2.1%, a tad higher than the provisional estimates of 1.9% 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% in December 2019.

Mining sector output increased by 5.7%, but electricity generation shrank by 0.1% in December 2019. The output of capital goods, which is a barometer of investment, rose by 0.6% in December 2020 as against a contraction of 18.3%.

Consumer durables output surged by 4.9%, compared to 5.6% contraction in December 2019.

Consumer non-durable goods production grew by 2%, compared to a contraction of 3.2% a year ago. The IIP for the April-December period has contracted by 13.5%, according to the data. It had registered a flat growth of 0.3 per cent during the same period last fiscal.