The Index of Industrial Production showed a positive increase of 3.88 percent in November 2016. The cumulative growth from April to November 2016 was 2.36 percent compared with the same period last year. Market Intelligence reports that the IIP trend in the textiles sector was nearly flat between November 2015 and November 2016. There were very few fluctuations during this period.
Economic Analysis relies heavily on short-term indicators to provide a comparative view of economic performance. This is essential for the formulation of policy. The Index of Industrial Production is a short-term indicator that measures changes in the volume of production of an economy. It is free of any price influences. The government uses this indicator to plan its policies. It is also used by many other organizations, including research institutes, academicians, and industrial associations.
The IIP provides a detailed description of the growth of each sector in an economy. According to the United Nations Statistics Division, the general scope of IIP includes mining and quarrying as well as manufacturing, electricity, steam, air conditioning, and gas supply. It also provides water supply, sewerage, and waste management. Due to limitations in data availability and resources, the current general IIP compiling in India only consists of the mining, manufacturing, and electricity sectors. In the overall IIP, mining, manufacturing, and electricity production are divided into 14.16 percent, 75.52 percent, and 10.32 percent, respectively.
The all-India IIP (Indicator of Industrial Productivity) is a composite measure of short-term changes in the production volume of a group of industrial products over some time compared to a base period. Central Statistics Office (CSO), under the Ministry of Statistics and Programme Implementation, compiles the data and publishes them with a one-and-a-half-month delay from the reference month. The IIP level is a number that represents an abstract quantity. Its magnitude represents production for a period compared to the reference period. The index level was set to 100 for the base year.
The CSO’s recent IIP report, which was released in November 2016, used 2004-05 to base the data. Data from 15 sources were used.
i. Department of Industrial Policy & Promotion
ii. Central Electricity Authority
iii. Indian Bureau of Mines
iv. Joint Plant Committee Ministry of Steel
Office of Textile Commissioner
vi. Ministry of Petroleum & Natural Gas
vii. Department of Chemicals & Petrochemicals
viii. Directorate of Sugar & Vegetable Oils
ix. Office of Coal Controller
x. Office of the Jute Commissioner
xi. Department of Fertilizers
xii. Railway Board
xiii. Office of Salt Commissioner
xiv. Tea Board
xv. Coffee Board
IIP sectoral industry groups
According to CSO’s report, the IIP of sectoral industries groups recorded an overall increase of 5.7% in November 2016 compared to November 2015. The general Index for November 2016 was 175.8, whereas it was 166.3 the previous year. Table 2 shows that the cumulative growth from April to November 2016 over the same period in the last year is 0.4 percent.
The IIPs for mining, manufacturing, and electricity were 135.9 each, with corresponding growth rates of 3.9, 5.5, and 8.9 percent, respectively. These three sectors’ cumulative IIPs between April and November 2016 were 124.2 (185.5) and 198.7, respectively. These three sectors recorded a cumulative growth rate of 0.3 percent, (-), 0.3 percent, and 5.0 percent, respectively, compared to the same period in 2015.
15 of the 22 manufacturing industry groups showed positive growth in November 2016 compared to November 2015. The highest growth was recorded by the ‘radio and TV equipment and apparatus’ group, with 32.18 percent. This was followed by a 23.21 percent increase in ‘electrical machines and apparatus n.e.c. The group ‘ motor vehicles trailers and semitrailers’ grew by 23.18 percent, and the group ‘radio, TV and communication equipment and apparatus’ grew by 32.18 percent. Furniture; Manufacturing n.e.c. The highest negative growth was 16.45 percent, followed by a 5.22 percent decline in “office, accounting and computer machinery” and a 3.17 percentage point decrease in “tobacco products.”
IIPs for industry groups
According to use-based classifications, the growth rate for basic goods, intermediate goods, and capital goods was 4.7 percent, 15.0%, and 2.7% in November 2016 compared to November 2015. Consumer durables and non-durables grew by 9.8% and 2.9%, respectively. The total growth of consumer goods was 5.6%. The index of basic and intermediate goods, when combined, showed positive growth rates of 4.1% and 3.4%, respectively. Capital goods, however, experienced a negative growth rate of 18.9% between April and November 2016 compared to the same period in 2015. The cumulative growth in consumer goods during April-November 2016 was 1.8%, while consumer durables showed a positive increase of 6.9%, and non-durables exhibited a negative growth of 1.8%.
IIP for textile industry groups
In general, the weight of the textile industry is 6.16 percent. It showed positive growth of 3.88 percent in November 2016, and the cumulative growth from April to November 2016 was 2.36 percent compared with the corresponding period last year. The apparel dressing and fur dyeing group showed a positive growth in November 2016, whereas April-November 2016 registered a negative growth of 3.56 percent over the same period last year. Its weighting in general IIP was 2.78 percent.
The IIP trend of the textiles group was very stable from November 2015 to November 2016. There was little fluctuation during this period. Textiles IIP was at its minimum (144.5) in November 2015 and reached its maximum (166.2) in December 2016.
