New Delhi: The growth rate of eight basic industries has come down to 2.1 percent in July. This information has been given in the official data released on Monday. The growth rate of basic industries was 7.3 percent in July 2018. The growth of basic industries has slowed down mainly due to reduced production of coal, crude oil, natural gas and refinery products.
The eight basic industries include coal, crude oil, natural gas, refinery products, fertilizer, steel, cement and electricity. According to the data, the production of coal, crude oil, natural gas and refinery products during the month under review declined compared to the same month last year.
During the four-month period of April-July in the current financial year, the growth rate of basic industries has come down to three percent from 5.9 percent in the same period of the previous financial year.
Slow growth in sales, production and employment has led to the country's manufacturing sector falling to a 15-month low in August. This information has been given on Monday in a monthly survey.
IHS Market's India Manufacturing Purchasing Managers' Index (PMI) fell from 52.5 in July to 51.4 in August. This is the lowest level since May 2018.
This is the 25th consecutive month when the PMI of manufacturing has been more than 50. An index greater than 50 indicates expansion while an index below 50 indicates contraction.
IHS Markit Principal Economist Pauliana de Lima said, "The Indian manufacturing industry witnessed sluggish economic growth and high-cost inflation pressures in August. Most of the PMI indices, including new work orders, production and employment indices, had a weakness.
On the global front, India's economic growth rate has come down to five percent in the June quarter due to sluggish private investment and consumer demand amid deteriorating conditions. This is the lowest growth rate in the last six years.
In August, sales have expanded at the slowest pace in 15 months. Which has also put pressure on production growth and employment generation. In addition, factories have reduced purchases for the first time since May 2018.
Lima said, "The decline in shopping activity for the first time in 15 months is a worrying sign. This has happened due to deliberate cuts in stock and lack of capital.
The survey said competitive pressures and challenging market conditions tried to stop the boom. The pace of new business orders from overseas also slowed in August. The slowdown in sales to domestic and international customers affected production growth. Some members of the survey have reported problems related to cash flow and decreased funding availability.
On the employment front, the survey said that weak sales have prevented manufacturing companies from retiring employees to replace other employees.
On the price front, input costs have risen to a nine-month high. The increase in cost price has also hindered procurement activities.
