New Delhi: Industrial production growth remained subdued at five-month low of 0.4 percent in August prompting the industry to raise pitch for bold reforms to spur the economy.
Factory output measured in terms of the Index of Industrial Production (IIP) growth remained slow in August mainly due to contraction in manufacturing output and lower offtake of consumer goods. The index had also grown at a meagre rate of 0.4 percent in August, 2013.
"There is a need for taking ... Steps to revive investment and stimulate demand in the economy. This would entail expediting execution of approved projects and providing a competitive market for coal and mining sectors," CII Secretary General Chandrajit Banerjee said.
He also hoped that the recent announcements and policy actions like 'Make in India' initiative, ensuring flexible labour policy, etc should help the turnaround.
IIP for July was also revised downwards to 0.41 percent from the provisional estimates of 0.5 percent released last month, according to the data released by the Central Statistics Office on Friday.
During the April-August period of 2014-15, IIP grew at 2.8 percent, as against flat production in same period in the previous fiscal.
According to the IIP data, manufacturing -- which constitutes over 75 percent of the index -- contracted by 1.4 percent in August, compared to 0.2 percent decline in output a year ago. For April-August, the sector grew at 1.8 percent, compared to 0.1 percent contraction in the year-ago period.
The consumer goods output contracted by 6.9 percent in August against 0.9 percent decline logged a year ago. For April-August, the segment showed contraction of 4.9 percent, compared to a decline of 1.6 percent in the same period of 2013-14.
Commenting on the IIP data, FICCI Secretary General A Didar Singh said, "Negative manufacturing growth reinforces the belief that fall in manufacturing growth has not yet bottomed out. It is more worrisome to see negative growth in consumer and capital goods especially when we were hoping the demand to pick up."
"This requires bold reforms in the business regulatory environment and also certain specific interventions in those sectors that continue to reel under slowdown," he added.
The consumer durables segment declined by 15 percent in August, as against a dip of 8.3 percent a year ago.
Consumer non-durable goods output too declined by 0.9 percent in August, compared to 5.4 percent growth in same month last year.
The production of capital goods, a barometer of demand, contracted by 11.3 percent in August, against 2 percent decline in same month of last year, the CSO data showed.
The mining sector grew by 2.6 percent in August against a dip of 0.9 percent a year ago.
Power generation, however, increased by 12.9 percent in the month under review compared to 7.2 percent growth a year ago.
Production of intermediate goods expanded by just 0.3 percent in August, compared to 3.8 percent growth a year ago. Basic goods output grew 9.6 percent in August against a growth of 0.9 percent a year ago.
Overall, 11 of the 22 industry groups in manufacturing showed positive growth in August.
