New Delhi: India’s industrial production shrank by a record of 55.5% in April from the year earlier with manufacturing crashing 64.3%, as computed from data released by the government, which didn’t provide a number for the change from April 2019 because of the Covid-19 lockdown.
The ministry of statistics & programme implementation also withheld the headline retail inflation figure for May but official data showed retail food inflation rose 9.28% on year last month. It had also withheld the headline inflation number for April on the grounds that the data wasn’t reliable because of the lockdown. One expert pegged retail inflation at 5.2%.
“In view of the preventive measures and announcement of nationwide lockdown by the government to contain spread of Covid-19 pandemic, majority of the industrial sector establishments were not operating from the end of March 2020 onwards,” the National Statistical Office (NSO) under the ministry said in a statement on Friday.
India imposed a nationwide lockdown on March 25 to curb the covid-19 outbreak. Curbs were eased starting early May in order to get the economy moving again.
This impacted production in April, with a number of responding units reporting zero production. “Consequently, it is not appropriate to compare the IIP of April 2020 with earlier months and users may like to observe the changes in IIP in the following months,” the NSO said, adding that these quick estimates will undergo revisions in subsequent releases as per policy.
The 55.5% decline is the sharpest since at least April 1994.For retail inflation, the government said that due to continued limited market transactions of products in May as well, it released the price movement of sub-groups/groups of Consumer Price Inflation (CPI) based on the price of only those items that were included which have been reported from at least 25% of markets, separately for the rural and urban sector and constituted more than 70% weight of the respective sub-groups/groups.
“We estimate headline CPI is around 5.2% and IIP contraction is at 55.5%. We believe core CPI may be undershooting 3.5% in April. We expect NSO to give out IIP and CPI estimates even if it is provisional as structural break in the series is unwarranted,” said State Bank of India chief economist Soumya Kanti Ghosh.