Factory output shrinks 1.2% in February amidst falling economic activity

1968| Morarji Ranchhodji Desai's Budget, commonly known as the People's Budget, simplified the assessment of goods by introducing the system of self-assessment for all manufacturers. This Budget also abolished 'spouse allowance'which was a tax saving tool for both the taxpayers - husband and the wife. This was done in order to "to eliminate this unintended strain on the relationship of marriage."

India’s industrial output contracted -1.2 percent in February from 2.7 percent in January and 2 percent in February last year, dashing hopes amidst faltering economic activity.

The manufacturing sector, which accounts for more than 75 percent of the index of industrial production (IIP), degrew -2 percent in February compared to 2.3 percent in January and 0.7 percent in February last year.

Factory output measured by the IIP is the closest approximation for measuring economic activity in the country’s business landscape.

Latest data shows that capital goods output, a metric to gauge capacity additions by companies, shrank -3.4 percent in February from 10.7 percent in January.

Consumer durables output was also down at -0.9 percent in February from (-) 9.5 percent in the same month last year, and 2.9 percent in January 2017.

Buying of consumer durables such as cars have shrunk since February after sales were hit by demonetisaation.

Mining production growth grew 3.3 percent during February, compared to January’s 5.3 percent jump and 5.1 percent growth in February last year.