The growth of IIP excluding capital goods rose modestly to 2.Sluggish output not likely to affect GDP calculations.5 per cent in August 2016 from 2 per cent in July 2016," said Ms Nayar.3 per cent while growth in non-durables segment was almost flat at 0.2 per cent. "The depressed private investment climate and global economic growth continues to impact the manufacturing sector growth in India."The latest figures depict a sluggish industrial economy that is beset by a lack of investment demand.On cumulative basis, the factory output in April-August contracted by 0. Private investment activity remains sluggish and calls for sustained efforts to address the structural bottlenecks in the economy," rubber O ring Factory said apex industry chamber Ficci.1 per cent to 3.7 per cent due to decline in manufacturing activity.""While the confluence of such factors should support a higher volume growth in various consumer goods sectors in second half of FY2017, the impact of the same on the performance of the IIP may be muted by an adverse base effect for consumer durables," she added."

The industrial production (IIP) data for August 2016 provided another disappointing print, with manufacturing volumes continuing to contract despite the boost from the double-digit growth of steel, passenger vehicles and two-wheelers," said Aditi Nayar, senior economist, at rating agency ICRA.1 per cent in August compared to 6 per cent a year ago.1 per cent in the year-ago period. In August manufacturing contracted by 0.49 per cent.India’s factory output contracted for the second straight month in August falling by 0.3 per cent, mining by 5. Output of consumer durables registered a growth of 2. She said that the sharp year on year de-growth in capital goods exerted the chief drag on the IIP in August 2016. Overall, consumer goods production recorded a growth 1..3 per cent, compared to growth of 4. Ms Nayar said that consumption demand is set to improve "appreciably in the coming months, with the kharif harvest forecast at record levels, revised pay and pensions being implemented by the Central Government and the impending festive season. However, the contraction in August was less severe than in July when industrial production had seen a decline of 2. A second negative print has essentially come on the back of another month of contraction in the capital goods segment with the usual category, rubber and insulated cables, exerting downward pressure," said Richa Gupta, Senior Economist, Deloitte India. "However, the other components recorded a mild growth ranging from 0.6 per cent and capital goods by 22.However there is hope that going forward consumption will see a growth due to good monsoon and pay hike of government employees.

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