India's May factory output down 34.7 pct, rebounds from April

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MUMBAI, July 10 (Xinhua) -- India's factory output contracted sharply by 34.7 percent in May to 88.4 over the same month last year, but indicated a gradual pickup in industrial activity from the preceding month, as per the data released by the Ministry of Statistics and Program Implementation on Friday.

In April, the Index of Industrial Production, which measures factory output in the country, had plunged by 55.5 percent to 53.6 as India was under the COVID-19-led nationwide lockdown.

"In view of the preventive measures and announcement of nation-wide lockdown by the Government to contain spread of COVID-19 pandemic, majority of the industrial sector establishments were not operating from the end of March 2020 onwards," said the ministry.

"This has had an impact on the items being produced by the establishments during the period of lockdown and the subsequent periods of conditional relaxations in restrictions."

The fall in industrial production in May has been broad-based across both sectoral and use-based classification. However, the extent of negative growth under each sub-head has been lower in May from last month, reflective of graded pickup in economic activity, said a note by credit rating agency CARE.

India, ranked third after the United States and Brazil for the number of confirmed COVID-19 cases, has been in the process of gradually relaxing its lockdown norms for resuming economic activity.

"Despite some relaxations, the lockdown still continues so this data cannot be compared with previous months. Ever since the nationwide lockdown began there has been an adverse impact on manufacturing, mining, infrastructure activities. Until the lockdown ends, the contraction in industrial production will continue to have a negative impact on India's GDP," said Rahul Gupta, head of Research Currency of Emkay Global Financial Services, a domestic stock brokerage house. Enditem

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