New Delhi: Stung by the coronavirus pandemic, industrial production contracted 8 percent in August, mainly due to lower output from the manufacturing, mining and power generation sectors, official data showed on Monday.
According to data from the Industrial Production Index (IIP), the production of the manufacturing sector registered a decrease of 8.6 percent, while the production of the mining and energy segments fell by 9.8 percent and 1.8 percent, respectively.
PII had contracted 1.4 percent in August 2019. PII in July had contracted 10.4 percent, better than 15.7 percent in June.
“It may not be appropriate to compare the IIP in the months after the pandemic with the IIP during the months before the COVID 19 pandemic,” the Ministry of Statistics and Program Implementation said in a statement.
“With the gradual relaxation of restrictions, there has been a relative improvement in economic activities to varying degrees, as well as in data reporting,” he added.
Additionally, retail inflation in September rose to 7.34% from 6.69% in August, mainly due to higher food prices, according to government data. . Food inflation was 10.68% in September compared to 9.05% in August.
The Reserve Bank of India primarily takes retail inflation into account when deciding the key interest rate.
“Manufacturing companies surveyed in the July-September 2020 round of the Reserve Bank’s Industry Outlook Survey expected sales prices to remain unchanged in the third quarter of the financial year due to benign cost pressures from inputs, “the RBI said.
The RBI, which last week kept interest rates unchanged, forecasts that consumer price growth will moderate to 4.5% in the first three months of next year and slow to 4.3% in the following quarter.
Although inflation has been above the target range, “the MPC judges that the underlying factors are essentially supply shocks that should dissipate in the following months as the economy unlocks, supply chains reestablish and activity normalizes. “the RBI said on Friday.
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