The government has released the data of IIP i.e. production of industries for July. The industrial production rate stood at 11.5% that month, up from 13.6% in June. If we talk about last year, then there was a decline of 10.5% in industrial production. Reuters had estimated the IIP in July to be 10.7%, based on a survey of 41 economists.
Year-on-year IIP growth from April to July jumped from -29.3% to 34.1%. The capital goods sector has seen a stellar recovery, which has grown from -22.8% year-on-year to 29.5%.
Industrial production started declining from March last year due to Covid. Then a nationwide lockdown was imposed to prevent the spread of the coronavirus. This led to a decline in economic activity and industrial production was down by 57.3% in April 2020.
As the name suggests, the figure of production of industries is called industrial output. It includes three major sectors. The first is manufacturing, that is, what is made in industries, such as things like vehicles, textiles, steel, cement.
The second is mining, which gives coal and minerals. The third is utilities, that is, things used for the general public. Such as roads, dams, and bridges. Whatever they produce together is called industrial production.
IIP is the unit of measurement of industrial production which is known as the Index of Industrial Production. However, for this, the base year of 2011-12 has been fixed. That is, the increase or decrease in the production of industries as compared to 2011-12 is called IIP.
77.63% of this entire IIP comes from the manufacturing sector. Apart from this, the direct impact of the production of these eight big industries ie electricity, steel, refinery, crude oil, coal, cement, natural gas, and fertilizer is visible on the IIP.
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