With the harm the pandemic has made for all financial activities in the nation in H1FY21, we had been finding used to the downturn in pretty much just about every sphere of the economy. Thus when in September, the IIP entered the positive territory for the 1st time in the year (1.%) buoyed by rise in all big parameters like mining (1.4%), manufacturing (.4%) and electrical energy generation (4.9%) and followed it up by related pattern in the next month also, it was believed that the sector has left behind the scourge and is back on track. However, the month of November took the sector beneath the benchmark line when once more. It may perhaps be that when the November indices are ultimately revised, the marginal decline in the indices would be rectified.
In December, other than the mining sector, each manufacturing (weight in IIP: 77.6%) and electrical energy generation (weight: 7.99%) showed positive development and pull up the IIP to clock 1.% development more than December of final year. Cumulatively, having said that, IIP indicates a contraction of 13.5% in the 1st 9 months of the present fiscal with other indices in mining, manufacturing and electrical energy generation however to move up the border line. As manufacturing comprises almost 78% of IIP, it is intriguing to look at the micro elements of manufacturing for the duration of the period.
Let us separate the manufacturing segments with positive development indications in December. The manufacturing of chemical compounds and chemical items, pharmaceuticals, medicinal chemical, rubber and plastic items show positive trend for the duration of the month. The indices that are linked with development in steel sector, namely manufacturing of fundamental metals, fabricated metals, electrical gear, machinery and gear, motor automobiles and trailers are displaying a increasing trend.
Mention may perhaps be produced of manufacturing of computer system, electronic and optical items that has clocked a fantastic development for the duration of the month. There are 5 big segments below manufacturing with higher weightage, namely manufacture of fundamental metals (wt:12.8), coke and refined petroleum (Wt: 11.77), chemical compounds (wt: 7.87), meals items ((wt: 5.30) and pharmaceuticals (wt: 4.98). Three of these (other than meals items and coke) showed positive development in the month.
Under use-based classification, the capital goods sector, the substantially steel-intensive segment has clocked a positive development of .6% in December, though infrastructure/building goods segment with a weightage of 12.34% in IIP has been sustaining a steady development considering the fact that September. The customer tough segment has been sustaining a positive trend considering the fact that September except a marginal fall in November and has considering the fact that moved up in December to clock 4.9% rise. The intermediate goods has clocked a positive development of .4% in December following its 1st development in October.
A handful of other segments below manufacturing possessing reasonably higher weightage like meals items is going to enter the positive territory when January 2021 information get published as the trend in the final handful of months are displaying. The manufacturing of textile items and apparel, other non-metallic mineral items as properly as manufacture of transport gear other than automobiles and trailers and furnishings manufacturing segments are nevertheless in the adverse territories.
The author is former DG, Institute of Steel Development and development