Low base pushes India's April IIP higher than pre-pandemic period

The Index of Industrial Production (IIP) for April zoomed to 126.6 (index reading) over the same month a year ago, when it stood at 54.

The April 2021 level was marginally higher from 126.5 index value which was reported for April 2019.

However, on sequential basis, April figure was lower when compared to March's index reading of 145.5.

"For the month of April 2021, the Quick Estimates of Index of Industrial Production (IIP)with base 2011-12 stands at 126.6," the Ministry of Statistics and Programme Implementation said.

"It may be noted that the nationwide lockdown and other measures implemented to restrict the spread of Covid 19 pandemic from the end of March 2020, had led to a majority of the establishments not operating in April 2020 and consequently, there were many  units which reported 'Nil' production, affecting comparison of the indices for the months of April 2020 and April 2021," it said.

As per the ministry, IIP for the mining, manufacturing and electricity sectors for the month of April 2021 stood at 108, 125.1 and 174, respectively.

"As per use-based classification, the indices stand at 126.7 for primary goods, 82.4 for capital goods, 137.9 for intermediate goods and 134.8 for infrastructure or construction goods for the month of April 2021."

Furthermore, the indices for consumer durables and consumer non-durables stood at 112.4 and 142.3, respectively, for the month of April 2021.

"We expect the IIP growth to flatten appreciably to under 20 per cent in May 2021, with an easing of the favourable base effect and the sequential moderation in volumes related to the second Covid surge and widening state level restrictions," said ICRA  Chief Economist Aditi Nayar.

"Moreover, the IIP is expected to slip below the pre-Covid level of May 2019 in the just concluded month."

India Ratings and Research Principal Economist Sunil Kumar Sinha said: "Clearly the path to economic recovery and a meaningful economic growth is not a FY22 but FY23 story."