Contraction in industrial production
The national statistics office(NSO) released a report which states a 3.6% decline in industrial production in February 2021. This says that it is the consequences of poor performance of the mining and manufacturing sector.
The manufacturing sector—which constitutes 77.63 per cent of the index of industrial production (IIP) — declined by 3.7 per cent in February 2021, as per the data released by the National Statistical Office (NSO).
The mining sector output declined by 5.5 per cent in February 2021. However, power generation grew marginally by 0.1 per cent in the month under review.
The index had grown by 5.2 per cent in February 2020. Industrial production had plunged 18.7 per cent in March last year following the COVID-19 outbreak and remained in the negative zone till August 2020.
With the resumption of economic activities, factory output posted a rise of one per cent in September. The IIP had grown by 4.5 per cent in October. In November 2020, the factory output fell 1.6 per cent, while it again entered the positive territory by growing 1.6 per cent in December 2020.
The IIP data for January 2021 has been revised to 0.9 per cent contraction from a 1.6 per cent decline, as per the provisional data released in March 2021.
The government had imposed a lockdown to contain the spread of COVID-19 infections on March 25, 2020.
With the gradual relaxation of restrictions, there has been a relative improvement in the economic activities by varying degrees as well as in data reporting, the Ministry of Statistics and Programme Implementation had said in a statement issued in November.
The ministry had also given a disclaimer that it may not be appropriate to compare the IIP in the post-pandemic months with the data for the months preceding the COVID-19 outbreak.
The manufacturing sector had recorded a growth of 3.8 per cent in February 2020.
Mining sector output too increased by 9.6 per cent in the same month last year. The electricity generation also grew at 11.5 per cent in February 2020.
The output of capital goods, which is a barometer of investment, slipped 4.2 per cent in February 2021, as against a contraction of 9.6 per cent a year ago.