Factory output fell by record 16.7% in Mar
GRIM OUTLOOK April will be worse with nil growth in most sectors, leading to a large dip in manufacturing growth rate
India’s factory output shrank by a record 16.7% in March as economic activity came to a standstill because of ongoing nationwide lockdown, prompting the government to announce a massive fiscal stimulus plan to revive industrial activity.
“The picture for April would be worse with virtually nil growth in most sectors, which will mean a very large dip in growth rate in manufacturing. Only some segments like food and pharma could show positive growth,” said Madan Sabnavis, chief economist at Care Ratings. The lockdown, which came into effect on March 25, also impacted data collection for both the index of industrial production and consumer price index (CPI); so much so that the National Statistical Office did not release the retail inflation number for April. It only released price movements of selected sub-groups of CPI as field investigators had to rely on telephonic enquiry for data collection from the designated outlets. The data showed food inflation quickening in April to 10.5% from 8.76% a month ago.
In March, manufacturing output slumped 20.6% while electricity generation shrank 6.8% and mining output grew at 0%, government data showed. For the year ended March 31, factory output contracted 0.7% against 3.8% growth in the previous year. This could impact the final GDP growth for FY20 to be released later this month. Most economists expect GDP to grow close to 4.5% in FY20 against the government’s estimate of 5% growth.
Most forecasters have also slashed their GDP growth projections for FY21, fearing the lingering impact of the lockdown on the Indian economy. Moody’s Investors Service expects the economy to grow at 0% in FY21, while Swiss bank UBS projected the country’s economy to contract 3.1% if mobility restrictions largely stay in place until end-june and economic activity returns to normal by end-august.
The country’s eight infrastructure sectors contracted by a record 6.5% in March after touching an 11-month high in February, data released by industry department last month showed. India’s manufacturing and services Purchasing Managers’ Index have also slumped to record lows.
The lockdown, considered the severest in the world, has led to massive retrenchment and loss of output.
Unemployment rate climbed to 27.1% in the week to May 3 before dropping to 23.97% in the following week, data from the Centre for Monitoring Indian Economy showed.
Franklin Templeton India has started reaching out to the 300,000-odd investors of the six debt schemes it had closed, following a rap on the knuckles from Securities and Exchange Board of India (Sebi) on Thursday, which had asked the asset management company (AMC) to focus on refunding investors.
Franklin has written to investors to verify details, such as PAN, folio numbers, and email addresses, said investors who spoke to However, it is still not clear whether it will repay investors in full or whether a haircut will be applied.
“The AMC will begin the crucial e-voting process later this week for investor consent to begin the winding down process,” said a person familiar with the development, requesting anonymity. The six debt schemes are being wound down under Section 41 of the mutual fund regulations. So far, the AMC has only obtained the approval of the trustees to wind down the funds.
“The e-voting process would require investors to vote and authorise trustees to wind down the schemes. After that the AMC can begin refunding investors. The email addresses are being sought in cases where only phone details are available,” said the person mentioned above.
A Franklin Templeton spokesperson was not immediately available for comment.
Life Sciences Ltd on Tuesday announced that its subsidiary Jubilant Generics Ltd has entered into a non-exclusive licencing agreement with Us-based Gilead Sciences Inc to manufacture and sell the potential coronavirus disease (Covid-19) drug remdesivir in 127 countries, including India.
Under the pact, Gilead will transfer its technology for manufacturing remdesivir to scale up production and enable expedited access to Covid-19 patients after approvals by the concerned authorities in various nations, it said in a regulatory filing.
These comprise nearly all low-income and lower middleincome countries, as well as several upper-middle and high“we income countries that have been facing significant hurdles to accessing healthcare after the pandemic, it said.