India’s Index for Industrial Production (IIP) receded 1.6pc in January compared to the year prior month, after growing 1pc in December 2020. The IIP for April-January period declined 12.2pc from the prior year period, according to the government data released on March 12. In January 2020, the general index had risen 2.2pc compared to 2019.
Production growth rate tumbled in January while inflation increased, marking a weakening market. Retail inflation is forecast to remain high on the back of high commodity prices, stated several reports.
IIP Broad Indices
The Index for mining slipped 3.7pc against a growth of 4.4pc in the prior year month. The index for manufacturing was down 2pc against a growth of 1.8pc in Jan 2020.
Electricity was the only one in the broad indexes to signify a growth of 5.5pc in January while it was 3.1pc in the year prior.
Manufacturing segment has taken the biggest blow in April-January period among the three broad indexes after contracting 13.6pc from the previous year. Mining index is down around 10.4pc.
The index for manufacturing of basic metals was up 4.2pc in Jan, but down 9.6pc for April-Jan period. Manufacturing of fabricated metal products was down 1.7pc in the first month and down almost 20pc for April-Jan period.
Manufacturing of motor vehicles, trailers and semi-trailers is almost flat in January but down 27.6pc for April-Jan. The index for infrastructure/construction goods in January rose marginally by 0.3pc as against a de-growth of 0.3pc in prior-year period.
Forward looking estimates
India’s GDP for the current fiscal year is estimated to drop 8pc. India’s economic recovery still remains cloudy as COVID-19 cases are mounting again which is likely to affect manufacturing in the coming months.