New Delhi: Stung by coronavirus pandemic, the industrial production contracted 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. The IIP in July had contracted 10.4 percent, which was better than 15.7 percent in June.
” 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.
Also, retail inflation in September rose to 7.34% from 6.69% in August,mainly on account of higher food prices, according to government data. . Food inflation was 10.68% in September as compared to 9.05% in August.
The Reserve Bank of India mainly factors in retail inflation while deciding on the key interest rate.
“Manufacturing firms polled in the July-September 2020 round of the Reserve Bank’s industrial outlook survey expected selling prices to remain unchanged in the third quarter of the financial year on the back of benign input cost pressures,” RBI said.
RBI, which last week kept interest rates unchanged, forecasts consumer price-growth to ease to 4.5% in the first three months of next year, and slow to 4.3% in the following quarter.
Although inflation has been above the targeted range, “the MPC judges that the underlying factors are essentially supply shocks which should dissipate over the ensuing months as the economy unlocks, supply chains are restored and activity normalizes,” the RBI said on Friday.