New Delhi: India’s manufacturing sector witnessed negative growth in the second quarter of the ongoing financial year. Once considered the backbone of the Indian economy, the sector grew at -1% in the July-September quarter.
Manufacturing growth had slumped to 0.6% in the first quarter of the current fiscal year from 3.1% in the fourth quarter of 2018-19. In the first quarter of the previous financial year, manufacturing growth was 12.1%. For the whole of the previous financial year, the sector had clocked a growth of 6.9%, up from 5.9% year-on-year.
The share of manufacturing in Gross Domestic Product (GDP) approximated to 17.38%. This comes at a time when the Centre’s flagship Make in India scheme aims to increase this share to 25% by 2022. Low consumer demand has negatively affected production in automobile and allied sectors as well as consumer goods, opined experts.
The country’s GDP growth rate for the second quarter of the ongoing financial year fell to 4.5%. This is the lowest since the January-March quarter of 2013.
The nominal GDP growth for the second quarter also fell to 6.1% as compared to 8% in the previous quarter. The GVA growth also dipped to 4.3% in comparison with 4.9% in the first quarter of the ongoing financial year.
Growth figures for the previous quarter had dipped to 5%, to an over six-year low. GVA growth too had fallen to 4.9% in the last quarter as compared with 6.9% in the same period last year.
This is the fifth consecutive quarter to have witnessed a fall.
Output of eight core infrastructure industries contracted by 5.8% in October, indicating the severity of economic slowdown, according to the government data released on Friday.
As many as six of eight core industries saw a contraction in output in October. Coal production fell steeply by 17.6%, crude oil by 5.1%, and natural gas by 5.7%. Production of cement (-7.7%), steel (-1.6%), and electricity (-12.4%) also declined during the month.
The only sector that posted growth in October was fertilisers where production increased by 11.8% year-on-year. Growth in output of refinery products slowed to 0.4% in October as against 1.3% in the same period last year.