Industrial Production Rises to 11.5%, Base Effect Propels Numbers

Industrial production rose 11.5% in July mainly due to a low-base effect and robust manufacturing and mining performance. A bulk of the weightage comes from industrial production, which rose grew 10.5% in July.

As the government has said in a release, "For July 2021, the Quick Estimates of Index of Industrial Production (IIP) with base 2011-12 stands at 131.4. The Indices of Industrial Production for the Mining, Manufacturing, and Electricity sectors for July 2021 stand at 104.6, 130.9, and 184.7 respectively.

These Quick Estimates will undergo revision in subsequent releases as per the revision policy of IIP." Along with this, as per the use-based classification, the indices stood at 128.5 for primary goods, 91.8 for capital goods, 143.1 for intermediate goods, 119.5 for consumer durables, 146.6 for consumer non-durables, and 143.5 for infrastructure or construction goods for the same period.

According to available data, the industrial output index increased to 122.6 in June 2021 from 107.9 in the same month last year. Hence, this shows the August IIP did perform better than the last two months. In June IIP increased by 13.6% y-o-y as an effect of a low base in the same period last year.

However, India's manufacturing sector is showing a slow but steady recovery process, as the vaccination drive is getting intensified and lockdown norms are being relaxed. As the country's output or production will grow, it will help to improve the domestic GDP to develop in this quarter.

The index for August 2021 will be published on October 12, which is expected to show an even better result.