India’s industrial production entered the negative zone after two months with a year-on-year contraction of 1.9 per cent in November because of poor showing by the manufacturing and mining sectors, official data showed on Tuesday.

Manufacturing — which constitutes 77.63 per cent of the index of industrial production (IIP) — recorded a contraction of 1.7 per cent in November 2020, according to data released by the National Statistical Office (NSO).

Mining sector output too witnessed a decline, shrinking 7.3 per cent. However, power generation grew 3.5 per cent in the month under review.

The country’s industrial output had grown 2.1 per cent in November 2019 and 4.2 per cent (revised) in October 2020, the government data showed.

Industrial production had plunged 18.7 per cent in March last year following the Covid-19 outbreak and remained in the negative zone till August 2020.

Among use-based industries, capital goods, which is an indicator for investment demand in the economy, slipped back into contraction of 7.1 per cent in November after registering a growth in October for the first time in 22 months.

Both consumer durables and consumer non-durables also contracted 0.7 per cent each in November, signalling weakening demand.

IIP for the April-November period has contracted 15.5 per cent, according to the data. It had registered a flat growth of 0.3 per cent during the same period last fiscal.

Consumer durables output fell by 0.7 per cent compared with 1.4 per cent contraction in November 2019. Consumer non-durable goods production fell 0.7 per cent, compared with a growth of 1.1 per cent a year ago.

“The YoY (year-on-year) decline in industrial output seen in November 2020 is expected to be fleeting, with many lead indicators such as electricity demand, exports, ports cargo traffic and GST e-way bill generation portending a solid rebound in activity in December 2020,” Aditi Nayar, principal economist of Icra, said.

“The November data once again shows that the uptick witnessed in the month of September and October was due to a combination of festive and pent demand and the recovery is still shallow and fragile,” Sunil Kumar Sinha, Principal Economist, India Ratings & Research said.

Among use-based industries, capital goods, which is an indicator for investment demand in the economy, slipped back into contraction of 7.1 per cent in November after registering growth in October for the first time in 22 months.

Both consumer durables and consumer non-durables also contracted 0.7 each in November, signalling weakening demand.

IIP for the April-November period has contracted 15.5 per cent, according to the data. It had registered a flat growth of 0.3 per cent during the same period last fiscal.