Industrial growth in India fell by 2.6% month-on-month in September while rising commodity prices rose slightly to 4.48% in October and a sharp rise in urban prices, according to data from the National Statistical Office.
Compared to September 2020, the Index of Industrial Production (IIP) grew 3.1% in September this year, with growth steadily declining from 12% recorded in August.
The companies said the decline in industrial activity was due to the shortfall in manufacturing and rising commodity prices. “Prices and a lack of resources affect the production and growth of IIP,” said President of the PHD Chamber of Commerce and Industry Pradeep Multani, adding that import prices could fall slightly due to lower oil taxes.
While the sharp decline in IIP growth was largely due to what happened, the gradual decline was due to concerns, says Rajani Sinha, an economist at Knight Frank India. “In order for the economy to be sustainable in 2022, a key driver can encourage consumer spending by promoting government policies,” he said.
Deloitte India economist Rumki Majumdar said, “Construction and construction activities are low, which cannot be matched by the rural needs and external consequences associated with the sector.”
Although Consumer Price index prices rose to 4.48% in October from 4.35% in September, the country’s urban areas fell sharply from 4.57% to 5.04% in October.
Consumer food prices recorded a 0.85% price increase in October, slightly higher than 0.68% last month but urban consumers rose sharply by 1.72%.
However, the rise in oil and oil prices remained at a high of 33.5% in October, while the rise in transport and communications stopped at 10.9%.
Rising vegetable prices
“The biggest monthly increase of 2.3% on food and beverages was driven by vegetable prices by 14.2%, which is expected to continue next month with another rise in prices of major commodities such as potatoes, onions and tomatoes,” said ICRA economist Aditi. Nayar, I would like to add that the recently announced oil tax cuts could offset the November price hike.
Automotive production fell 9% in September from a year ago. Consequently, automotive production declined for the second consecutive month, down 3.3% on August output, according to the IIP, possibly due to a lack of chip.
Mining output rose 8.6% year-on-year, while manufacturing and electricity generation rose slightly 2.7% and 0.9%, compared to September 2020.
Consumer production durables dropped by 2% in September from a year ago, but was 6.67% higher than in August. Short-term consumer productivity, however, recorded a fall of 0.5% year-on-year, and was 0.88% below the level this August.