India's latest Index of Industrial Production numbers, which monitor industrial production in the country, suggest the country's industrial output shrank by 0.8% in April after March and February notched up modest jumps (of 2% and 0.3%) over the same months last year. The primary reason for this is the manufacturing sector, which accounts for nearly 3/4ths of the index. The sector shrank by 3%.
Between April 2015 and March 2016, India's IIP had grown by 2.4% over the previous year. The drop in IIP numbers, even with the previous year providing a low base, suggest that the country's economy cannot be in very good shape.
That impression is buttressed by the sectors that have done well in the April numbers. According to a report by Equirus Securities, industries like 'furniture', ‘radio, TV and communication equipment' and ‘office machinery’ have posted the highest growth numbers – 28%, 18.8% and 18.7% respectively. In contrast, the industries India needs to do well for a manufacturing surge – like mining – stayed low. The sector posted a growth of just 1.4% in April. Similarly, capital goods, a barometer of investment, declined by a massive 24.9% in April, compared to a 5.5% growth the same month last year.
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