Industrial production as measured by IIP declined 0.8 per cent during April 2016, against 3 per cent increase in April 2015, but declines in this month two and three years back. Manufacturing declined 3.1 per cent, but power generation was up robustly by 14.6 per cent, and mining by a weak pace 1.4 per cent.

In manufacturing, there were eight industries with negative growth rates, the list was headed by electrical machinery & apparatus with 56 per cent annual erosion; the industry had declined 11 per cent in fiscal 2016, but had recorded solid 18 per cent average rise in FY14 and FY15. The 14 industries with positive growth included furniture, jewellery, which grew 25 per cent in April and 45 per cent during FY16.  Machinery and equipment increased 7.6 per cent, passenger cars 6.4 per cent and other transport vehicles 6.6 per cent, which should help projects investment, even as electrical machinery was on downslide.

Some of the causal factors behind the overall industry feat were:

Item Group Weights (%) Contribution
High Negative Contributors
Cable, Rubber Insulated 0.12 -3.7108
Sugar (including sugar cubes) 1.52 -1.3565
Cotton Seed Oil 0.08 -0.2844
Plates 1.25 -0.1953
Antibiotics & It’s Preparations 2.38 -0.1675
High Positive Contributors
Electricity 10.32 1.496
Gems And Jewellery 1.77 0.5106
Telephone Instruments Including Mobile Phone And Accessories 0.22 0.3317
Commercial Vehicles 1.93 0.3142
Diesel, High Speed 2.11 0.3041

We may note here that under several industry groups, like other non-metallic mineral products, machinery & equipment, furniture, manufacturing, n.e.c., etc. clubbing of items is so extraneous that it is extremely difficult to draw any conclusion as to what has contributed to the specific industry’s growth dynamics.

In mining, coal, crude oil and natural gas all were in negative growth zone.

Going by classification of industries by their application (use), also hotchpotch grouping, capital goods that cater to projects investment needs urgent remedial measures, following 25 per cent decline in April and declines four out of preceding five years, barring a solitary 6.4 per cent YoY growth during FY 15. Among the other investment goods that help project investment, alloy, non-alloy steel increased 6.1 per cent (-1.4 per cent in the preceding fiscal) and cement production 4.4 per cent in April (+ 4.6 per cent in FY 16). Consumer durables that include passenger cars, white goods, etc. but also jewellery increased 12 per cent in April, and 11 per cent during 2016. Intermediate goods increased 3.7 per cent and basic goods 4.8 per cent. Consumer non-durables declined; consumer durables increased 9.7 per cent.

Bearing testimony to the impact of sustained focus for improvement, power generation by public utilities increased 14.6 per cent in April and a robust 6.4 per cent average over past five years, which is over three times overall growth in industry (including power). This has followed decent capacity addition and good improvement in PLF. Power seems to have ceased to be a hindrance to industry at the present juncture.

Index of Industrial Production (Y-o-Y % increase)
  April April-March
2015-16 2016-17 2014-15 2015-16
Mining -0.6 1.4 1.4 2.2
Mfg 3.9 -3.1 2.3 2
Electricity -0.5 14.6 8.4 5.7
Overall IIP 3 -0.8 2.8 2.4
Use-based classification
Basic goods 2.6 4.8 6.9 3.6
Capital goods 5.5 -24.9 6.3 -2.9
Intermediate goods 2.3 3.7 1.7 2.5
Consumer goods 2.8 -1.2 -3.5 3
Consumer durables 1.3 11.8 -12.6 11.3
Consumer non-durables 3.7 -9.7 2.8 -1.8

 Infra industries

The eight infra industries that constitute 38 per cent of broader IIP posted 8.5 per cent strong growth in April following 14+ rise in electricity and 18 per cent in refinery production, In fact, barring coal, crude oil and natural gas the other three industries were in positive zone. Fertilizer production was up 7.8 per cent, cement production 4.4 per cent and alloy, non-alloy steel 6.1 per cent during the month.

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