March industrial production down 2.3% yoy

India's industrial production contracted the most in well over a decade in March due to a sharp drop in the manufacturing output, even as electricity and mining components reported growth, government data showed. Industrial output shrank 2.3% in March as against a growth of 5.5% in the same month last year, beating average expectation of a 0.5-0.7% fall, the Central Statistical Organisation (CSO) said. This is the worst performance for the IIP since January 1993. February's figure was revised to a 0.7% drop from a preliminary estimate of a 1.2% decline.

Within the Index of Industrial Production (IIP), the manufacturing segment shrank by 3.3% (5.7%), while mining rose by a modest 0.4% (4.9%) and electricity output climbed by a decent 6.3% (3.7%), the CSO data revealed. For the year ended March 31, 2009 industrial production was up by just 2.4% as against 8.5% in the previous financial year. The cumulative growth in the three sub-segments has been pegged at 2.3%, 2.3% and 2.8% respectively during April-March 2008-09 over the year-ago period.

As many as 5 out of the 17 industry groups showed positive growth during the month compared to the corresponding month of the previous year. The industry group ‘Beverages, Tobacco & Related Products’ showed the highest growth of 15.1%, followed by 8.3% in ‘Basic Chemicals & Chemical Products’ and 7.0% in ‘Transport Equipment & Parts’. On the other hand, the industry group ‘Food Products’ showed a negative growth of 35.8% followed by 25.1% in ‘Wood & Wood Products' and 19.7% in ‘Other Manufacturing Industries’.

The sectoral growth rates in Basic Goods, Capital Goods and Intermediate Goods during the month stood at 1.4%, (-) 8.2% and (-) 4.4%, respectively. Consumer Durables and Consumer Non-durables recorded growth of 8.3% and (-) 3.6% respectively, with the overall growth in Consumer Goods being (-) 0.8%.