Industrial growth during the first five months of the current fiscal year has been the lowest in at least 10 years, according to the Index of Industrial Production (IIP).

Chart 1 shows that industrial growth was -0.27% during April-August 2016, the lowest since at least 2007-08. Moreover, industrial growth so far this fiscal year has been even worse than during April-August 2009, immediately after the Lehman crisis. Far from a recovery, the IIP data indicates a deepening gloom in the industrial sector.

Chart 2 has the break-up on the IIP data for the past five years. During April-August this year, the manufacturing sector contracted by 1.18%, the worst showing in at least five years. The contraction has been the most in capital goods, as the chart shows and it’s even worse than the contraction in 2012-13.

For consumer non-durables too, growth has been the least in the last five years, with the drought in the last two years bearing part of the blame. Consumer durables are the only bright spot in the industrial sector, although here too growth in the first five months of the current fiscal year has been lower than a year ago.

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