It has been reported that The High base effect, along with supply-side constraints such as semiconductor shortages, eased India`s industrial output growth to 3.2 percent in October, on both year-on-year and sequential basis.
The rise in the Index of Industrial Production (IIP) for October marginally eased to 3.2 percent from 3.30 percent in September 2021.
Similarly, on a year-on-year basis, the October output showed a decelerating trend from a growth of 4.5 percent reported for the corresponding period of the previous fiscal.
“For the month of October 2021, the Quick Estimates of Index of Industrial Production with base 2011-12 stands at 133.7,” the Ministry of Statistics and Programme Implementation said.
Manufacturing Production
“The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of October 2021 stand at 109.7, 134.7 and 167.3 respectively”, the company said.
In terms of Yoy percentage basis, the mining excavation output grew by 11.4 percent from (-) 1 percent in 2020-21, but, manufacturing production fell 2 percent from 4.5 percent and electricity generation decreased by 3.1 percent from 11.2 percent.
Among the major use-based segments, the October data, on a YoY basis, showed that manufacturing of primary goods grew by 9 percent from (-) 3.1 percent, whereas capital goods production fell by (-) 1.1 percent from a rise of 3.2 percent, and intermediate goods decreased by 2.1 percent from 3.2 percent.
The production of infrastructure or construction goods also fell by 5.3 percent from 10.9 percent.
Consumer durables` production fell by (-) 6.1 percent from a growth of 18.1 percent and the sub-segment of consumer non-durables grew by just 0.5 percent from a rise of 7.3 percent.
Industrial Growth
ICRA Chief Economist Aditi Nayar said, “Industrial growth printed at a stable yet tepid 3.2 percent in October 2021, with the festive season boost being negated by the supply side issues afflicting the auto sector, as well as a higher base.”
“The disaggregated data does not provide convincing signals of the recovery becoming durable and broad-basing further, with capital goods and consumer durables reporting a YoY contraction in October 2021.”
India Ratings & Research Chief Economist Devendra Kumar Pant said, “Despite 25.3 percent growth in GST collection and 7.5 percent growth in core infrastructure sectors, October 2021 IIP growth was impacted by the base effect and grew 3.2 percent only.”
IIP Growth
“The IIP growth has been very fragile and even festive demand was not able to uplift IIP growth in October 2021. A contraction of 6.1 percent for consumer durable and 0.5 percent growth in consumer non-durable are testimony of weak demand conditions in the economy. Only the mining sector has shown good growth of 11.4 percent.”
Acuite Ratings & Research Chief Analytical Officer, Suman Chowdhury said, “While the momentum of industrial revival is slower than expected, the output levels have started to exceed the pre pandemic levels.”
“We expect moderate growth in IIP over the next few months given the raw material shortages and thereby, the likely production constraints in certain sectors. (zee news)
