India’s industrial output, as measured by the Index of Industrial Production (IIP), grew 3.1 per cent in September, supported by a double-digit increase in electricity generation. This is compared with a contraction of 0.8 per cent in the previous month and a growth of 4.4 per cent in September 2021.
What The Report Pointed:
According to the latest data from the Ministry of Statistics & Programme Implementation, the country’s industrial production during April-September 2022 jumped 7 per cent, compared with 23.8 per cent in the year-ago period.
India’s electricity sector output grew in double-digits at 11.6 per cent year-on-year to 187.4 on the IIP in September, mining saw a 4.6 per cent jump to 99.5, and manufacturing posted a 1.8 per cent rise to 134.3, according to the official data.
“For the month of September 2022, the Quick Estimates of Index of Industrial Production (IIP) with base 2011-12 stands at 133.5 The Indices of Industrial Production for the mining, manufacturing and electricity sectors for the month of September 2022 stand at 99.5, 134.3 and 187.4 respectively. These quick estimates will undergo revision in subsequent releases as per the revision policy of IIP”.
The Other Side:
Consumer durables saw a contraction in output over the last two months, contrary to the typical growth period ahead of the festive months with increasing demand. Consumer durables output slipped 4.5% in September after falling 2.5% in August.
Economist Rajani Sinha said the poor performance of IIP consumer durables and non-durables is worrisome. Improvement in domestic consumption demand will be critical for a sustained recovery in India’s growth momentum. Strong growth in capital goods and Infrastructure is encouraging and is hopefully a precursor to a pick-up in the capex cycle, she said.
The Index of Industrial Production (IIP) is an index that indicates the performance of various industrial sectors of the Indian economy. It is a composite indicator of the general level of industrial activity in the economy.
How is IIP calculated:
IIP is calculated as the weighted average of production relatives of all the industrial activities. In the mathematical calculation Laspeyre’s fixed base formula is used.
What are the Core Industries in India:
- The main or the key industries constitute the core sectors of an economy.
- In India, there are eight sectors that are considered the core sectors.
- They are electricity, steel, refinery products, crude oil, coal, cement, natural gas and fertilizers.
Which has highest weightage in IIP:
- The eight core sector industries in decreasing order of their weightage: Refinery Products> Electricity> Steel> Coal> Crude Oil> Natural Gas> Cement> Fertilizers.
Who releases IIP data:
- The IIP data is compiled and published by CSO every month.
- CSO or Central Statistical Organisation operates under the Ministry of Statistics and Programme Implementation (MoSPI).