Mint Quick Edit | India’s industrial weakness mustn’t persist
The index of industrial production put up a weak show in June, though a few segments outperformed the rest. What we need, of course, is a long awaited factory boom.
As economic growth concerns loom, India’s latest industrial production data won’t do anything to lift the spirits of policymakers. Government numbers released on Monday showed the index of industrial production grew a weak 1.5% in June from a year earlier, slipping from May’s revised 1.9% expansion.
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Mining and electricity were big drags, with their output declining 8.7% and 2.6%, respectively. While heavy rainfall may have played a role in that, since it tends to reduce power demand and slow mining activity, the negative readings can’t be explained by rain alone.
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A relative bright spot was the manufacturing sector, which posted a 3.9% increase in output last month. This was stronger than May’s 3.2% rise, suggesting a pick-up in factory work. The output of consumer durables rose 2.9%, while that of non-consumer durables fell 0.4%.
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Infrastructure and intermediate goods showed mid- to high-single digit growth. But overall industrial growth is a let-down in a country that needs a factory boom to generate jobs and draw multitudes away from farms. Increasing the share of manufacturing in GDP is tough, but we must do it. The upward mobility of large numbers may depend on it.
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