Industrial output dropped 0.4% in December 2016 from last year and stands at 183.5. Central Statistics Office, which released the index of industrial production on Friday, attributed the contraction to a 2% decline in manufacturing output. The fall comes as India still continues to grapple with a cash crunch caused by the demonetisation of Rs 500 and Rs 1,000 currency notes on November 8.
As many as 17 out of the 22 industry groups in the manufacturing sector registered a negative growth in December, reported NDTV. The sale of commercial vehicles, motorcycles, gems, jewellery and cement all went down. The other parameters like electricity generation and mining rose by 6.3% and 5.2%, respectively. The cumulative growth of the factory’s output for the April-December period was 0.3% while the same was at 3.2% in the last fiscal.
In November, industrial production beat all expectations with the index rising to a 13-month high of 5.7% while in October it fell by 1.9%. But Crisil Chief Economist DK Joshi had told Business Standard in November that these data presented a “false positive”. “This implies that the growth rate indicated is too high. It was expected to be in the negative zone as November was the first month to have captured the impact of demonetisation,” Joshi had said.