In the strongest indication of an industrial crisis, growth in India’s industrial production contracted by 16.7 per cent in March. This is the biggest fall among all the data series collected with base years of 1980-81, 1993-94, 2004-05 and 2011-12.

Based on the latest data available, industry has a share of 28.3 per cent in Gross Value Added (GVA; once tax is added, it becomes GDP) during the first half of fiscal year 2019-20. This means almost one third of the economy is in the contraction zone --- an indication that the fourth quarter of FY2019-20 (January-March) GDP number will be very disappointing as well. The number is expected to be made public at the end of this month.

Meanwhile, the government has not released the headline retail inflation number for April as there were very limited transactions in the market. It did make public price movements of some groups of goods such as fruits, vegetables, pulses and sugar, but these are not enough to provide an overall picture.

Manufacturing sector’s show

Manufacturing sector growth slipped to (-) 20.6 per cent, which is also its steepest fall. Devendra Kumar Pant, Chief Economist with India Ratings & Research, said the numbers are on expected lines as the economy was locked down for a quarter of the month.

“Barring mining, all sectors contracted. The April 2020 numbers are likely to be even worse,” he said.

The Quick Estimates of the Index of Industrial Production (IIP) are released on the 12th of every month (or the previous working day) with six weeks’ lag and compiled with data received from source agencies, which in turn receive the data from producing factories/ establishments.

According to the Statistics Ministry, due to the lockdown, the flow of data from the producing units has been impacted.

As some of these units are yet to resume operations, the response rate has been lower than usual.

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