Country's factory output dips after signs of recovery

After an impressive 9.87 percent growth in October that triggered hopes of a recovery, India's factory output declined by 3.19 percent in the following month into the negative territory, due to a (-)4.4 percent drop in manufacturing activity. As per data on index of industrial production (IIP) released by the Central Statistics Office, the cumulative growth of the country's factory output was also pulled down to 3.9 percent in the first eight months of the current fiscal year. Between the other broader indices, electricity production was up marginally by 0.7 percent, while that for mining was at 2.3 percent. Downfall in IIP numbers to -3.2% in November 2015 is a major worrying factor as the industry was expected to grow in a good growth trajectory, said Dr. Mahesh Gupta, President, PHD Chamber of Commerce and Industry in a press statement. Slowdown in domestic demand is a major factor and government must take demand boosting measures to help industry growth to revive in the coming times, said Dr. Gupta. Going ahead, efforts should be taken to enhance the disposable income of the households vis-a-vis simplification of taxation system and enhanced tax incentives to individuals and reduction in the interest rate scenario, said Dr. Mahesh Gupta. These measures would go a long way to boost consumer demand and growth of manufacturing sector in the economy, said Dr. Gupta. Courtesy: SME Times

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