The states of Haryana and Gujarat, also manufacturing hubs, saw electricity requirement growing at a weaker 2.9 per cent and 5.3 per cent compared with the previous year’s 7.5 per cent and 8.8 per cent, respectively.
Several automakers were forced to trim their workforce and shutter factories temporarily to manage inventories as a prolonged slowdown in domestic consumption spawned the worst downturn in car sales in almost two decades in July. Data on Friday showed GDP
expanded 5 per cent in the three months through June from a year earlier, the slowest pace since March 2013.
Increasing demand from factories and commercial firms is key to revival of India’s money-losing electricity distributors. These consumers account for about half of the power consumption
and pay more, helping subsidize others including poor households and farmers. Prime Minister Narendra Modi pledged to electrify every home, a promise that helped in his re-election this year but one that could prove costly for state utilities unless businesses purchase more electricity.
Data on diesel, another fuel closely tied to industrial performance, offers more evidence of the slowing factory demand.
Consumption during the April-July period grew 2.4 per cent from a year earlier, slower than 4 per cent expansion seen in the year-ago period, according to the government’s Petroleum Planning & Analysis Cell.
Stalling of new private sector projects, a slump in sales of automobiles, especially commercial vehicles, and a resulting slowdown in the auto parts industry contributed to slowing diesel consumption in the world’s fastest growing fuel market.