India's industrial production growth drops to 2% from 7% a year earlier

Amid the economic slowdown in several sectors, India's industrial production growth slumped to 2 per cent in June 2019 from 7 per cent a year earlier. According to government data released on Friday, the factory output, as measured by the Index of Industrial Production (IIP), slipped to a four-month low due to the poor performance of mining and manufacturing sectors.

The previous low in IIP growth was in February 2019, when it had inched up 0.2 per cent. However, after that the growth picked a little pace, and IIP grew at 2.7 per cent in March, 4.3 per cent in April and 4.6 per cent in May this year. As per the Ministry of Statistics and Programme Implementation, the industrial output grew at 3.6 per cent in April-June quarter this fiscal, down from 5.1 per cent growth a year ago.

Amid the economic slowdown, JSW Group Chairman and MD, along with other industry leaders met with Finance Minister Nirmala Sitharaman, seeking a stimulus package from government to revive the economy.

"The Finance Minister has assured that special attention will be given to the MSME and NBFC sectors as they play a vital role in the revival of our economy. They have also committed to address the issues of the Steel, Auto & Textile sectors on priority," Jindal said.

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There is a massive downturn in auto industry as well. Nearly 3,50,000 people have lost their jobs since April as India’s auto sector faces worst ever slump, forcing companies to shut down their factories and axe shifts, according to a report published in Reuters.

The report, citing industry sources, slumping sales of cars and motorcycles have forced automakers, parts manufacturers and dealers to laid off these workers. While car and motorcycle owners handed pink slips to at least 15,000 employees, component manufacturers laid off 100,000 employees. The remaining jobs were lost at dealers end with many of them closing their agencies.

Recently, leaders of auto sectors, including Maruti Suzuki Chairman RC Bhargava, M&M President - Automotive Sector Rajan Wadhera, had also met the finance minister with similar demands. During the meeting, the auto industry broadly presented factors such as issues regarding availability and affordability of financing, increasing cost of acquisition of vehicles and change in axle load capacity for commercial vehicles that have hurt demand.