With the injury the pandemic has created for all financial actions in the nation in H1FY21, we have been getting used to the downturn in virtually each sphere of the economic system. Thus when in September, the IIP entered the constructive territory for the primary time in the yr (1.0%) buoyed by rise in all main parameters like mining (1.4%), manufacturing (0.4%) and electrical energy technology (4.9%) and adopted it up by related sample in the following month additionally, it was thought that the business has left behind the scourge and is again on monitor. However, the month of November took the business under the benchmark line as soon as once more. It may be that when the November indices are lastly revised, the marginal decline in the indices could be rectified.
In December, aside from the mining sector, each manufacturing (weight in IIP: 77.6%) and electrical energy technology (weight: 7.99%) confirmed constructive growth and pull up the IIP to clock 1.0% growth over December of final yr. Cumulatively, nevertheless, IIP signifies a contraction of 13.5% in the primary 9 months of the present fiscal with different indices in mining, manufacturing and electrical energy technology but to maneuver up the border line. As manufacturing contains practically 78% of IIP, it’s attention-grabbing to take a look at the micro elements of producing through the interval.
Let us separate the manufacturing segments with constructive growth indications in December. The manufacturing of chemical compounds and chemical merchandise, prescription drugs, medicinal chemical, rubber and plastic merchandise present constructive development through the month. The indices which are linked with growth in metal business, specifically manufacturing of primary metals, fabricated metals, electrical gear, equipment and gear, motor automobiles and trailers are displaying a rising development.
Mention may be made of producing of pc, digital and optical merchandise that has clocked an excellent growth through the month. There are 5 main segments underneath manufacturing with excessive weightage, specifically manufacture of primary metals (wt:12.8), coke and refined petroleum (Wt: 11.77), chemical compounds (wt: 7.87), meals merchandise ((wt: 5.30) and prescription drugs (wt: 4.98). Three of those (aside from meals merchandise and coke) confirmed constructive growth in the month.
Under use-based classification, the capital items business, the considerably steel-intensive phase has clocked a constructive growth of 0.6% in December, whereas infrastructure/building items phase with a weightage of 12.34% in IIP has been sustaining a gentle growth since September. The shopper sturdy phase has been sustaining a constructive development since September besides a marginal fall in November and has since moved up in December to clock 4.9% rise. The intermediate items has clocked a constructive growth of 0.4% in December following its first growth in October.
A couple of different segments underneath manufacturing having moderately excessive weightage like meals merchandise goes to enter the constructive territory when January 2021 information get revealed because the development in the previous couple of months are displaying. The manufacturing of textile merchandise and attire, different non-metallic mineral merchandise in addition to manufacture of transport gear aside from automobiles and trailers and furnishings manufacturing segments are nonetheless in the unfavourable territories.
The writer is former DG, Institute of Steel Development and growth