Industrial output up 29.3% in May due to low base

Economy

By Administrator_ India

Capital Sands

India’s industrial production grew 29.3 percent in May as compared to the same period a year ago, as the impact of a low base continued for yet another month.

In May last year, factory output, measured by the Index of Industrial Production, contracted 33.4 percent. This is because factories remained shut due to the imposition of the nationwide lockdown last year.

On a sequential basis, IIP fell nearly 8 per cent from April 2021, making the impact of the state-wise lockdowns during the second wave of the pandemic in May 2021 evident.

The sequential fall in activity levels is also reflected in manufacturing activity as well as electricity generation. Economists said that year-on-year data may not be strictly comparable as it will portray an exaggerated picture. The real comparison should be done with pre-pandemic data. Compared with May 2019, the industrial output is lower than the current level.

The cumulative contraction during April-May (2021-22) was 68.8 percent, compared to a de-growth of 45 percent during the same period a year ago, data released by the government showed.

Manufacturing sector output, which accounts for more than 77 percent of the entire index, saw growth of 34.5 percent YoY in May 2021 as compared to a contraction of 37.8 percent during the same period a year ago.

A 9.5 percent decline in manufacturing output from April can be attributed to restrictions imposed across states during the first two months of the current fiscal to control the spread of the second wave.

Leave a Reply

Your email address will not be published. Required fields are marked *