- Manika Premsingh
While a recession means overall slowdown in growth, some industries are harder hit than others. Which are these?
If you have been following the Indian economy, you could not have missed the "going-nowhere" growth rates across a spectrum of indicators. Indeed, economic growth, as measured by the Gross Domestic Product (GDP) is at recessionary levels, where recessionary levels are essentially prolonged below-trend growth figures.
The industry component of Indian GDP has been hardest hit so far by the economic slowdown (and is reciprocally the a major contributor to the slowdown as well). But, as in all recessions, some industries have borne more than their proportionate share of the slowdown than others.
So which industries have been hardest hit?
A look at growth in segments of the Index of Industrial Production (IIP) over 2012-13, reveals that there are 10 industry segments that are actually facing depression i.e. their production is shrinking. The biggest hit among these have been faced by segments like machinery and equipment, with a special emphasis on equipment for office related machinery, auto industry, publishing and printing, wood products and furniture and mining and quarrying. (The table to the left gives an exhaustive list of industry segments, click to enlarge it).
While the blanket explanation for this slowdown across segments will be the demand challenge - both from the export market and increasingly the domestic market, as well as the slowing down of the Indian reforms process over the past few years, the question as to why some of these industries have underperformed compared with others remains. Any guesses?