Weak economic activity as reflected in poor IIP numbers may prompt the central bank to cut interest rates in its mid-quarter policy review next week
New Delhi: India's industrial production growth rate slowed to just 0.1% in July due to poor show by manufacturing, mining and capital goods sectors, reflecting weak economic activity which may prompt the Reserve Bank of India (RBI) to cut interest rate in its mid-quarter policy review on Monday, reports PTI.
Industrial output in the April-July period of this fiscal has thus contracted by 0.1%, according to the official data released on Wednesday.
Growth in factory output, as measured by the index of industrial production (IIP), was 3.7% in July last year, and 6.1% in the April-July period in 2011-12.
The manufacturing sector, which constitutes over 75% of the index, witnessed a contraction in output by 0.2% in July, as against growth of 3.1% in the same month last year.
The performance of the manufacturing sector in April-July was poor as output contracted by 0.6%, as against a growth of 6.5% in the four-month period of last year.
The capital goods production also down by 5% in July against a contraction of 13.7% in the same month a year ago.
The output of capital goods contracted in April-July period by 16.8%, as against a growth of 8.2% in 2011-12.
Mining output in July dipped by 0.7%, as against a growth of 0.7% in the same month a year ago.
The sector's production in April-July quarter declined by 0.9%, compared to a growth of 0.6% in 2011-12.
Consumer goods production was up 0.7% in July as compared to 6.4% growth in the same month last year.
During the April-July period of this fiscal, the growth in the segment was 3.3%, compared to 4.9% in the four month period a year ago.