IIP: India’s Industrial Production Contracts 55.5% In April

The Index of Industrial Production contracted 55.5% year-on-year in April.

Pallavi Nahata @PallaviNahata

12 Jun 2020, 08:19 PM IST

A security guard wearing a protective mask sprays workers with disinfectant at an entrance to the factory. (Photographer: Prashanth Vishwanathan/Bloomberg)

India’s industrial output contracted the most in at least two decades in April after the world’s biggest lockdown to contain the new coronavirus pandemic froze economic activities.

The Index of Industrial Production contracted 55.5% year-on-year in April, the most since at least 1996. That compares with a revised contraction of 18.3% in March. A Bloomberg poll of 31 economists had estimated a contraction of 45% in April.

The government, in its release, did not provide year-on-year change and only released index numbers. As such, the change in industrial output and its components has been computed by BloombergQuint using index data for April 2020 and April 2019.

A majority of industrial sectors were not operating after the nationwide lockdown was imposed, effective March 25. That impacted items being produced during April. A number of responding units even reported nil production, the statement said. As such it’s not appropriate to compare IIP of April 2020 with earlier months, it said. These estimates will undergo revision in subsequent releases.

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Sectoral Estimates

Among the three key sectors, manufacturing was the worst hit. Mining and electricity generation, too, registered a sharp decline from March. Sectoral rate of change has also been computed using index data released by government.

Manufacturing output growth contracted 64.3% in April compared to a contraction of 22.4% in March.
Mining output contracted 27.4% after a contraction of 1.4% in the previous month.
Electricity generation contracted 22.6% against a contraction of 8.2% last month.

Industrial output, as classified by the end-use of goods, indicated a contraction across all categories.

Primary goods output contracted 26.6% compared with a contraction of 4.1% in the preceding month.
Capital goods output contracted 92% in April against a 38.3% contraction in the previous month.
Intermediate goods output contracted 66.4% compared with a contraction of 18.5% last month.
Infrastructure and construction goods output contracted 83.9% in April compared with a 25.2% contraction in March.
Consumer durables output contracted 95.7% compared with a 36.5% contraction in March.
Consumer non-durables output contracted 36.1%, compared to a contraction of 20.3% in March.