New Delhi: India’s power demand fell 13.2 per cent in October from a year ago, posting its steepest monthly decline in over 12 years, government data showed. The decrease in demand reflected a deepening growth slowdown in Asia’s third-largest economy.
India needs electricity to fuel its expanding economy but a third decline in power consumption in as many months points to tapering industrial activity in the nation which aims to become a $5 trillion economy by 2024.
India’s June quarter GDP grew at its weakest pace in six years as consumer demand and government spending slowed, and economists see the falling electricity demand as a reflection of a further slowdown.
“The slowdown seems to be deep rooted, especially in the industrial sector. That would certainly increase the anxiety with regard to growth prospects in the current year,” said NR Bhanumurthy, a professor at the National Institute of Public Finance and Policy in New Delhi.
Consumption in heavily industrialised states such as Maharashtra and Gujarat led the decline. Last month, power demand in Maharashtra declined by 22.4 per cent and in Gujarat by 18.8%, the data from the Central Electricity Authority (CEA) showed. Save for a few states in the north and east, India’s power demand fell in most of the states.
India’s infrastructure output in September contracted 5.2 per cent, the worst in 14 years, adding to the worries of the government that has been unable to revive demand in the economy despite several steps in the last few months.
It’s fuel demand growth – also seen by economists as an indicator of economic activity – is on track for the slowest pace in six years.
Slower economic activity has resulted in a fall in sales of everything from cars to cookies, with some large scale industries resorting to large job cuts.
India’s automobile sector, for instance, has cut hundreds of thousands of jobs, citing an unprecedented decline in sales.
The Indian government, which has not revised its growth forecast of seven per cent for the financial year, is expected to release data on economic growth by the end of this month. Information on electricity demand prior to January 2006 is not publicly available.
Agencies