New Delhi: The high base effect coupled with supply side constraints such as semiconductor shortages slowed India’s industrial output growth to 3.2 per cent year-on-year and sequential basis in October.
Growth in the Index of Industrial Production (IIP) for October moderated marginally to 3.2 per cent from 3.30 per cent in September 2021.
Similarly, on a year-on-year basis, October production showed a declining trend from the 4.5 per cent growth reported for the same period of the previous fiscal.
“The Quick Estimate of the Index of Industrial Production with a base of 2011-12 for the month of October 2021 is 133.7,” the Ministry of Statistics and Program Implementation said.
“The indices of industrial production of the mining, manufacturing and power sectors for the month of October 2021 stand at 109.7, 134.7 and 167.3 respectively.”
On a year-on-year basis, mining quarry production grew by (-) 1 per cent to 11.4 per cent in 2020-21, but, manufacturing output fell by 4.5 per cent to 2 per cent and electricity generation declined by 11.2 to 3.1 per cent. Percent.
Among the key use-based segments, October data on a year-on-year basis showed that manufacturing of primary goods grew by (-) 3.1 per cent to 9 per cent, while capital goods production grew by (-) 1.1 per cent. declined. increased by 3.2 percent, and intermediate goods decreased by 3.2 percent to 2.1 percent.
Production of infrastructure or building materials also fell 5.3 percent from 10.9 percent.
Production of consumer durables fell by (-) 6.1 per cent from a growth of 18.1 per cent and the consumer non-durables sub-segment grew by only 0.5 per cent from a growth of 7.3 per cent.
ICRA Chief Economist Aditi Nair said: “Industrial growth printed at a stagnant yet 3.2 per cent in October 2021, fueled by a higher base along with supply side issues affecting the auto sector in the festive season.”
“The unconsolidated data does not provide a solid indication of the recovery becoming durable and broad-based, with capital goods and consumer durables reporting a YoY contraction in October 2021.”
Devendra Kumar Pant, Chief Economist, India Ratings and Research, said: “Despite a 25.3 per cent growth in GST collections and 7.5 per cent growth in core infrastructure sectors, October 2021 IIP growth was hit by the base effect and grew by only 3.2 per cent.”
“IIP growth has been very fragile and even festive demand was not able to drive IIP growth in October 2021. Growth of 6.1 per cent for consumer durables and 0.5 per cent for consumer non-durables is evidence of weak demand conditions. Economy. Only the mining sector has shown a good growth of 11.4 per cent.
Suman Choudhary, chief analytical officer, Acuite Ratings & Research, said: “While the pace of industrial revival is slower than expected, production levels have begun to exceed pre-pandemic levels.” Read also: work at google? You Can’t Get a Pay Increase, Here’s Why
“We expect moderate growth in IIP over the next few months, given the raw material crunch and potential production constraints in some sectors. Also read: Passengers will get bedrolls, blankets in trains? Know what Indian Railways has to say
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