Jobs-intensive sectors slump

Hyderabad: The industrial production (IP) in India has reportedly grown by 4.3 per cent in July 2019, according to government data released Thursday.

Though the industrial production has slowed considerably compared to 6.5 per cent growth in July 2018, the headline growth number has remained positive.

The devil, however, lies is in the details. The data shows that the production in several labour-intensive sectors, which are crucial to sustain and creating jobs, has actually shrunk in July.

According to the numbers released by the ministry of statistics and programme implementation, the textiles sector, one of the largest job creators, has seen its production shrunk by 4.5 per cent. The production of machinery and equipment has de-grown five per cent, fabricated metal products shrunk by 10 per cent, and furniture production has contracted by 10 per cent.

Contraction in the production of sectors like textiles, machinery and equipment, fabricated metal products and furniture, which are mostly MSMEs-led, could have an adverse impact on the job creation in the country. Industrial sectors like base metals, coke and refined petroleum products, which contributed the most in getting a positive headline industrial growth figure, are not considered as job intensive or spread out across the country.

The production numbers, through use-based categorisation by the government, show that capital goods and consumer durable goods sectors have shrunk.

A de-growth in capital goods business means the industry has reduced investment in expansion of its production, despite government’s attempts to boost investment.

A lower growth in consumer durable goods means that people are postponing their decision to buy relatively big ticket items.

The item-wise categorisation shows that harvesters and threshers, which were becoming mainstay of the farming operations in many of the developed parts of India, due to a shortage of agriculture labour, have seen the largest contraction in production — a sign of lower investment in rural India.

As a PTI report added, India’s industrial production growth slowed to 4.3 per cent in July, dragged mainly by manufacturing sector’s poor show.

Factory output, as measured by the Index of Industrial Production (IIP), had expanded to 6.5 per cent in July last year.

The industrial output growth was recorded at 1.2 per cent in June and 4.6 per cent in May this year.