The Index of Industrial Production (IIP), or factory output growth, stood at 12.6% in June 2022, mainly due to a lower base effect.

“The growth rates over corresponding period of previous year are to be interpreted considering the unusual circumstances on account of covid-19 pandemic since March 2020,” said an official statement.

The IIP growth was below projections made by economists at Bank of Baroda, who pegged it at 5.5% for June.

Manufacturing growth, at 3.1%, brought down the overall growth rate after 14 of the 23 sectors in manufacturing registered negative growth, said Madan Sabnavis, chief economist at Bank of Baroda.

“The significant non-performers were food, textile-related and electronics among others. The performance of electronics is a disappointment as this industry had been a front runner for the production-linked incentive scheme,” Sabnavis said.

“The third quarter will be crucial for the manufacturing sector as this would be the time when the festival demand would add to growth. Here both rural and urban demand would matter,” he added.

As per the IIP data released by the National Statistical Office (NSO), electricity generation saw a growth of 4.2% in June 2023 compared with 16.4% a year ago.

Mining output grew 7.6% during the month against a 7.8% rise in the year-ago period, and the capital goods segment grew 2.2% compared with 28.6% a year ago.

During the April-June FY24 period, the growth in IIP stood at 4.5%, down from 12.9% in the year-ago period.

Consumer durables output fell in June by -6.9% against 25.2% growth in the year-ago period. Consumer non-durable goods output increased by 1.2 % compared with 2.9% a year earlier.

“The year-on-year growth in the IIP slid to a weaker-than-expected three-month low of 3.7% in June 2023 belying the hope engendered by the core sector print. The sequential slowdown was led by the manufacturing sector, while the mining and electricity sectors witnessed an improvement in their growth performance amid deficient rainfall in the month,” said Aditi Nayar, chief economist, ICRA Ltd.

Updated: 11 Aug 2023, 11:52 PM IST