Index of Industrial Production (IIP) In India Grew By 3.2% In October

The Ministry of Statistics & Programme (MoSPI) on Friday released the Estimates of Index of Industrial Production of October, showing a 3.2% growth in October. However, the industrial output had increased by 4.5% in October, in the last year and gained 3.1% in September. The IIP also slowed down than 3.1% ticked in September, this year.

According to an official source, this year the mining output in October increased by 11.4%, the manufacturing sector output increased by 2%, while electricity generation in the month increased by 3.1%. The government receives the data from the producing factories or establishments.

The pace of growth of industrial output has certainly slowed down from the last month, diluting the low base effect. Economic growth and employment generation are also under pressure in the current quarter.

The ministry stated, for October 2021, the Quick Estimates of Index of Industrial Production (IIP) stands at 133.7. The Indices of Industrial Production for the Mining, Manufacturing, and Electricity sectors for October 2021 stand at 109.7, 134.7, and 167.3 respectively. Factory output during the April-October period increased by 20% against a contraction of 17.3%, in the same period, 2020.

The MoSPI today stated, "As per Use-based classification, the indices stand at 128.5 for Primary Goods, 90.3 for Capital Goods, 143.7 for Intermediate Goods and 151.8 for Infrastructure/ Construction Goods for the month of October 2021. Further, the indices for Consumer durables and Consumer non-durables stand at 125.6 and 149.5 respectively for the month October 2021."

Nish Bhatt, Founder & CEO, Millwood Kane International said, "The October industrial production has slowed down on MoM & YoY basis, despite other indicators showing a recovery. The October IIP at 3.2% is below most estimates. The growth in IIP has been erratic and it slowing down despite October being a festive season month. This puts some doubts about the economic recovery that is underway. Most constituents have shown degrowth like electricity, manufacturing, infra goods, consumer durables, consumer non-durables with mining and primary goods the only exception. The chip shortage has been a cause of concern for the smooth functioning of industrial activities across the globe. The auto sector has seen the most disruption. The H1 IIP at 20% is largely a factor of a lower base. The industrial data need to clock in regular double-digit growth for sustained overall economic growth."