Industrial output down and inflation up, India Inc ask Jaitley for economy’s revival remedies


Industrial output in December shrank 1.3 percent for the second month in a row.

And as if this wasn’t enough, the retail inflation in January went up to a 16-month high at 5.69 per cent in January compared with 5.61 per cent in December. It stood at 5.19 per cent in January 2015.

This has prompted the industry to call for urgent policy action in the forthcoming Budget to kickstart the much-needed revival in Indian economy.

One of the most important factors attributed to the continuous fall in factory output is a decline in production of capital goods and manufactured products.

While the experts say that the reason for continuous rise in retail inflation is because of costlier food items.

Industrial production contracted 1.3 per cent in December, as against a decline of 3.4 per cent in November, according to data released by the Central Statistics Office (CSO).

The industrial activity had grown by 3.6 per cent in December 2014.

Sunil Kumar Sinha, Principal Economist, India Ratings & Research.told PTI News agency, “As both high-frequency data show deterioration, the macroeconomic management of the economy by the government as well as RBI is going to be more difficult ahead, particularly when the Union Budget is due by the end of this month.”

Alarmed over these worrying number, the India Inc has asked for urgent policy remedies.

Assocham President Sunil Kanoria told PTI, “Estimates of industrial production for December 2015 mirrored the subdued industrial activity in the country and call for urgent policy remedies.”

The decline in December IIP has been primarily on account of a massive drop in output of capital goods, which contracted 19.7 per cent as against a growth of 6.1 per cent in the same month a year ago. .


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