India's Annual Electricity Demand Growing At Slowest Pace In 6 Years
According to government data, India's annual electricity demand in 2019 grew at its slowest pace in six years with December recording a fifth straight month of the fall.
Electricity demand is a crucial indicator of industrial output in the country. A continued decline in electricity demand further indicates the economic slowdown.
India's power demand grew at 1.1% in 2019, data from the Central Electricity Authority showed, the slowest since 2013.
In December, India's power demand declined 0.5% from a 4.3% fall in November. However, India's western states, Maharashtra and Gujarat, which are extremely industrialised provinces witnessed an increased monthly demand. In October, power demand slipped 13.2%, recording its steepest monthly decline in more than 12 years.
The industrial sector accounts for more than two-fifths of the country's annual electricity consumption, while homes account for nearly a fourth and agriculture more than a sixth.
India's overall economic growth dipped to 4.5% in the July-September quarter, government data released in November witnessed the weakest pace since 2013 as consumer demand and private investment slipped.
"This reflects overall economic slowdown, because if you look at other high-frequency data like diesel consumption, everywhere you are seeing contraction," Rupa Rege Nitsure, chief economist at L&T Financial Holdings.
The Reserve Bank of India will not slash rates to stimulate the economy because inflation has risen to 7.35% in December compared with 1.97% in January last year. Economists estimate that India's growth will continue to be around 4.5% levels in the Oct-Dec quarter.