Contraction In Industrial Output Worrisome, Companies' Profits Down By Up To 40%: CMIE

Huge population battered by both economic recession and coronavirus pandemic, has been struggling to try to get life back on track in an economy that is on the verge of collapse.

As per the June report from the Center for Monitoring Indian Economy (CMIE) Index of Industrial Production (IIP) has slipped to 36, pointing to a worrying situation in the country. The index (IIP) provides data on the production status of the country's industrial sector.

But the story of economic ruin started in September last year when the IIP had become negative at that time. The situation then worsened in December 2019, in March 2020, and in June during the Coronavirus crisis and lockdown.

The government is blaming the pandemic for the declining economy, but it is clear from these figures that India's economy was continuously weakening for the last 2 years and the pandemic added to the woes.

Another concern is the constant shutdown of industries. Figures in the first quarter of FY 2020-21 after the lockdown show that 1560 listed companies have reported that their revenues fell by 26 per cent, expenses by 28 per cent and profits by 24.6 per cent.

During the same period, 1241 non-financial companies have reduced 36.3 per cent of income, 37.5 per cent of expenses and about 41 per cent of profit. The year 2019 proved to be a nightmare for the economy where GDP had gone below 5% and unemployment was at its peak. The government, which was facing all-round attacks, had said that this recession is short-term but new figures show that the economy is in the grip of a severe recession and the government cannot hide its failure under the cover of Coronavirus pandemic.