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Factory output contracts 2.1% in November

K. R. Srivats
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A poor show on the manufacturing front led factory output to a second straight month of contraction in November 2013 at 2.1 per cent.

The weakness in manufacturing, which contracted sharper than expected at 3.5 per cent, came primarily on account of a 21.5 per cent decline in consumer durables output.

The November 2013 factory output is at a six-month low, indicating that the RBI will pause on policy rates in its February meeting on the back of expected softening in headline and retail inflation numbers, say economy watchers.

The previous low in Index of Industrial Production (IIP) was recorded at May 2013 with a contraction of 2.5 per cent.

After a long gap, mining recorded a growth, at 1 per cent in November. Electricity generation saw a spike of 6.3 per cent for the month under review.

Factory output had contracted 1 per cent in November 2012.

Meanwhile, the IIP contraction for October 2013 has been revised to 1.57 per cent from 1.8 per cent earlier.

In the use-based classification, capital goods output for November 2013 grew 0.3 per cent against a contraction of 8.5 per cent in the corresponding month last year.

Consumer goods output declined 8.7 per cent (-0.3 per cent).

The IIP data for November 2013 was disappointing, but most of the negativity was concentrated around consumer durables, said Upasna Bharadwaj, Chief Economist, ING Vysya Bank.

“Rest of the components have shown stability. Mining and electricity have done well. This November performance is not a broad-based weakness in IIP. If one were to exclude consumer durables, the IIP would have actually grown 1.5 per cent as against contraction of reported 2.1 per cent”, she told Business Line.

CII view

Confederation of Indian Industry (CII) Director General Chandrajit Banerjee said the November IIP is extremely worrisome.

“What’s also causing concern is the performance of the manufacturing sector, indicating that new investments are still not happening. The low base of last year also magnifies the concerns”.

However, going forward, it is hoped that a spate of good news, notably the rebound of the economies of the US and Europe, an upturn in exports, a good monsoon and pragmatic government policies, especially on fast-tracking projects, would help industrial production rebound.

srivats.kr@thehindu.co.in

(This article was published on January 10, 2014)
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Union Budget 2014-15 Highlights

  • Following are the highlights of the Union Budget 2014-15 presented by Finance Minister Arun Jaitley in Parliament on July 10, 2014
  • Income-tax exemption limit raised by Rs 50,000 to Rs 2.5 lakh and for senior citizens to Rs 3 lakh
  • Exemption limit for investment in financial instruments under 80C raised to Rs 1.5 lakh from Rs 1 lakh.
  • Investment limit in PPF raised to Rs 1.5 lakh from Rs 1 lakh
  • Deduction limit on interest on loan for self-occupied house raised to Rs 2 lakh from Rs 1.5 lakh.
  • Committee to look into all fresh tax demands for indirect transfer of assets in wake of retrospective tax amendments of 2012
  • Fiscal deficit target retained at 4.1% of GDP for current fiscal and 3.6% in FY 16
  • Rs 150 crore allocated for increasing safety of women in large cities
  • LCD, LED TV become cheaper
  • Cigarettes, pan masala, tobacco, aerated drinks become costlier
  • 5 IIMs to be opened in HP, Punjab, Bihar, Odisha and Rajasthan
  • 5 more IITs in Jammu, Chhattisgarh, Goa, Andhra Pradesh and Kerala.
  • 4 more AIIMS like institutions to come up in AP, West Bengal, Vidarbha in Maharashtra and Poorvanchal in UP
  • Govt proposes to launch Digital India’ programme to ensure broad band connectivity at village level
  • National Rural Internet and Technology Mission for services in villages and schools, training in IT skills proposed
  • Rs 100 cr scheme to support about 600 new and existing Community Radio Stations
  • Rs 100 cr for metro projects in Lucknow and Ahmedabad
  • Govt expects Rs 9.77 lakh crore revenue crore from taxes
  • Govt’s plan expenditure pegged at Rs 5.75 lakh crore and non-Plan at Rs 12.19 lakh crore.
  • Rs 2,037 crore set aside for Integrated Ganga Conservation Mission called ‘Namami Gange’
  • Kisan Vikas Patra to be reintroduced, National Savings Certificate with insurance cover to be launched
  • FDI limit to be hiked to 49% pc in defence, insurance
  • Disinvestment target fixed at Rs 58,425 crore
  • Gross borrowings pegged at Rs 6 lakh crore
  • Contours of GST to be finalised this fiscal; Govt to look into DTC proposal.
  • ‘Pandit Madan Mohan Malviya New Teachers Training Programme’ launched with initial sum of Rs 500 crore
  • Govt provides Rs 500 crore for rehabilitation of displaced Kashmiri migrants
  • Set aside Rs 11,200 crore for PSU banks capitalisation
  • Govt in favour of consolidation of PSU banks
  • Govt considering giving greater autonomy to PSU banks while making them accountable
  • Rs 7,060 crore for setting up 100 Smart Cities
  • A project on the river Ganga called ‘Jal Marg Vikas’ for inland waterways between Allahabad and Haldia; Rs 4,200 crore set aside for the purpose.
  • Govt proposes Ultra Modern Super Critical Coal Based Thermal Power Technology
  • Expenditure management commission to be setup; will look into food and fertilizer subsides
  • Impasse in coal sector will be resolved; coal will be provided to power plants already commissioned or to be commissioned by March 2015
  • Long term capial gains tax for mutual funds doubled to 20%; lock-in period increased to 3 years
  • Rs 4,000 cr set aside to increase flow of cheaper credit for affordable housing to the urban poor/EWS/LIG segment.
  • EPFO to launch the ‘Uniform Account Number’ service to facilitate portability of Provident Fund accounts
  • Mandatory wage ceiling of subscription to EPS (Employee Pension Scheme) raised from Rs 6,500 to Rs 15,000
  • Minimum pension increased to Rs 1,000 per month
  • Union Budget 2014: List of products getting cheaper/ costlier

  • Finance Minister Arun Jaitley today spared the common man from price hikes by keeping duties on commonly used day-to-day items unchanged but made it costlier for smokers and tobacco consumers with a steep increase in excise rate in tax proposals in Budget 2014—15.
  • Following is a list of what will be cheaper and costlier:
  • YOU WILL PAY LESS FOR
  • CRT television
  • LED/LCD TVs especially below 19 inch
  • Footwear priced between Rs 500 to Rs 1,000 per pair
  • Soaps
  • E—book readers
  • Desktop, laptops and tablets
  • RO based water purifiers
  • LED Lights, fixtures and lamps
  • Pre forms of precious and semi—precious stones
  • Sports Gloves
  • Branded petrol
  • Matchbox
  • Life micro insurance policies
  • HIV/AIDS drugs and diagnostic kits
  • DDT insecticides
  • YOU WILL PAY MORE FOR
  • Cigarettes
  • Aerated drinks with sugar
  • Pan masala
  • Gutka and chewing tobacco
  • Jarda scented tobacco
  • Radio Taxi
  • Imported electronic products
  • Portable X—ray machines
  • Half cut/broken diamonds.

  • DATA BANK

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    Dollar Spot Forward Rate

    Open-Ended Mutual Funds

    MCX-SX Currency Futures

    NSE Currency Futures


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