IIP grows 11.9% in August on low-base effect, good performance by manufacturing and mining

New Delhi: Industrial production grew 11.9 percent in August mainly due to a low-base effect and good performance by manufacturing, mining and power sectors that surpassed the pre-COVID level. The manufacturing sector, which constitutes 77.63 percent of the Index of Industrial Production (IIP), grew 9.7 percent in August, according to the data released by the National Statistical Office (NSO) on Tuesday. The mining sector output rose 23.6 percent in August, while power generation increased 16 percent. In August 2021, the IIP stood at 131.1 points compared to 117.2 points in the same month last year. The index stood at 126.2 points in August 2019, as per the NSO data. The data showed that industrial production recovered and surpassed the pre-pandemic level of August 2019. The IIP had contracted by 7.1 percent in August 2020. Industrial production plunged 18.7 percent in March last year following the COVID outbreak and remained in the negative zone till August 2020. With the resumption of economic activities, factory output rose 1 percent in September 2020 and grew 4.5 percent in October. In November 2020, the factory output fell 1.6 percent and then entered the positive territory with a 2.2 percent growth in December 2020. The IIP had recorded a contraction of 0.6 percent and 3.2 percent in January and February respectively. In March, it grew 24.2 percent. For April, the NSO held back the release of complete IIP data. In May 2021, the IIP rose 27.6 percent, and in June, it grew 13.6 percent. The factory output grew 11.5 percent in July. The second wave of the pandemic started in the middle of April, and many states imposed restrictions to curb the spread of coronavirus infections. “The growth rates over the corresponding period of the previous year are to be interpreted considering the unusual circumstances on account of COVID-19 pandemic since March 2020,” the NSO said in a statement. The government had imposed a nationwide lockdown to contain the spread of coronavirus infections on March 25, 2020. The manufacturing sector had recorded a contraction of 7.6 percent in August 2020. The mining sector output fell 8.7 percent in the same month. The electricity generation had declined 1.8 percent in August 2020. The output of capital goods, which is a barometer of investment, grew 19.9 percent in August 2021. It had witnessed a contraction of 14.4 percent in the year-ago period. Consumer durables manufacturing increased 8 percent in the month under review against a decline of 10.2 percent in August 2020. Consumer non-durable goods production grew 5.2 percent in August over a 3 cent contraction in the year-ago period.