Downward spiral: Industrial output shrinks by 1.1%; at nearly 7-year low

Industrial output crashed to an 81-month low in August, reducing by 1.1 per cent after a contraction in manufacturing output and a deepening slowdown in capital goods production pulled down growth.

Falling by the highest margin since November 2012, the index of industrial production (IIP) is now expected to remain muted this fiscal year. 

“The IIP is likely to show an erratic, low-growth trend. The policy measures announced by the government after the first quarter GDP growth of 5 per cent are more of a supply-side intervention and unlikely to boost demand,” said Devendra Kumar Pant, chief economist at India Ratings &