India’s IIP falls unexpectedly in February

Pulled down by lower levels of manufacturing, the Industrial Production in India plunged by 1.2 per cent Y-o-Y to a three-month low in February 2017, despite a forecast of 1.3 per cent rise in the IIP in 2017 by the market experts.

While, cumulatively the factory output in the first 11 months of FY17 was 1.2 percent lower compared to the same period in the previous financial year.

The contraction in IIP is being credited to unfavourable base effect from February 2016, according to industry experts, that spoke to a leading English daily. 

The manufacturing output reduced by 2 per cent on a Y-o-Y basis in February 2017, however, the same had witnessed an upward trend in January 2017. Whereas, 15 out of the 22 industry groups in the manufacturing sector recorded a negative growth as an effect of demonetisation, while, the output of consumer goods also posted a fall of 5.6 per cent.

However, the electrical machinery and apparatus industry grew by 17.4 per cent, electricity generation went up by 0.3 per cent and the mining & quarrying activities increased by 3.3 per cent in February 2017.

The growth rate of the tobacco industry stooped sharply at 42.8 percent, followed by a decline of 21.7 per cent in the food and beverage industry's revenues.