Di­wali ef­fects jack up IIP for Oc­to­ber

Project Monitor - - FRONT PAGE - DR M.S.KA­PA­DIA ndex of In­dus­trial pro­duc­tion shot up 9.8 per cent in Oc­to­ber the high­est rate over past five years. How­ever, on closer ex­am­in­ing of the data, we gath­ered that a part of spurt re­flected base ef­fect. Ad­just­ing the data for base ef­fect, the I

Min­ing

Mfg

Elec­tric­ity

Over­all IIP

Use-based clas­si­fi­ca­tion

Ba­sic goods

Cap­i­tal goods

In­ter­me­di­ate goods

Con­sumer goods

Con­sumer durables

Con­sumer non-durables

DWALI EF­FECT ON IIP NUM­BERS

2007

2010

2012

2015

Oc­to­ber

19.6

11.3

8.4

9.8

2014-15

2.1

1

10.8

2.2

8.1

4.6

1.5

-6.3

-16

1.1

9.9

6.4

-1

? IIP, min­ing, man­u­fac­tur­ing and elec­tric­ity ex­panded at bloated rates due to base ef­fects.

Fil­ter­ing for month-tomonth vari­a­tions, in­dus­try has grown fur­ther over AprilOc­to­ber pe­riod on the back of strength­en­ing man­u­fac­tur­ing. IIP in­creased 4.8 per cent (2.2 per cent) dur­ing the first seven months of the on­go­ing fis­cal. Man­u­fac­tur­ing ex­panded 5.1 per cent against stag­na­tion in the sim­i­lar pe­riod in last two years. Min­ing was up 2 per cent (2.1 per cent) and elec­tric­ity 5.2 per cent (10.8 per cent).

In man­u­fac­tur­ing, 7 out of 22 ma­jor in­dus­tries de­clined cu­mu­la­tively, whereas the 15 oth­ers were in pos­i­tive growth phase. Fur­ni­ture, gems & jew­ellery, etc shot up 59 per cent. The in­dus­try, com­pris­ing mainly gems & jew­ellery, is turn­ing out su­perla­tive out­put since around De­cem­ber 2014. Wear­ing ap­parel in­creased 12 per cent and elec­tri­cal ma­chin­ery 15 per cent. Ba­sic

2015-16

2

5.1

5.2

4.8

4.4

8.9

2.6

4.5

11.8

0.1

Cap­i­tal goods put up ro­bust show

Helped by a strong Q2 per­for­mance, cap­i­tal goods in­dex showed 8.9 per cent ex­pan­sion till Oc­to­ber, twice the pace a year ago, and a de­cline two years back. Ce­ment pro­duc­tion in­creased 2.6 per cent, but al­loy, non-al­loy steel de­clined over the pe­riod. Th­ese com­modi­ties are im­por­tant in­puts in con­struc­tion part of projects in­vest­ment. Con­sumer durables in­creased 12 per cent, against 16 per cent de­cline in this pe­riod a year ago. Con­sti­tut­ing mainly pas­sen­ger cars, mo­tor cy­cles and gems & jew­ellery, the use­based group seems to be com­ing out of a pro­longed JuneNovem­ber 2014 slack. Con­sumer non-durables stag­nated at year ago level as in the cor­re­spond­ing pe­riod a year ago. Ba­sic goods grew less. In­ter­me­di­ate goods in­dex fared slightly bet­ter.

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