Electricity Current Affairs

IIP expands at 7.5% in January 2018

According to data released by the Central Statistics Office (CSO), India’s factory output, measured by Index of Industrial Production (IIP) recorded overall 7.5% growth in January 2018, indicating early signs of industrial revival.

Factory output grew at 7.1% in December 2017, before hitting 25-month high of 8.4% in November 2017. The cumulative IIP growth for period of April-January over corresponding period of previous year was 4.1%.

Key Facts

Manufacturing sector: It increased to 8.7% in January 2018 as compared to 8.5% in December 2017. It was led by improved production of consumer durables and continued double-digit growth of consumer non-durables as well as capital goods.

Mining output: It recorded growth of 0.1% in January 2018 compared to 1.2% in December 2017.

Electricity generation: It recorded 7.6% growth in January 2018, as compared 4.4% growth in December 2017.

Capital goods output: It is a barometer of investment and considered as proxy to measure private sector investment activity. It was 14.6% in January 2018 compared to 16.4% in December 2017.

Consumer durables output: It was 8% in January 2018 as compared meagre 0.9% rise in December 2017.

Consumer non-durables production: It recorded 10.5% growth in January 2018 from 16.5% in December 2017.

Index of Industrial Production (IIP)

The IIP is composite indicator that measures short-term changes in volume of production of basket of industrial products during given period with respect to chosen base period. It is compiled and published monthly by Central Statistical Organization (CSO), Ministry of Statistics and Programme Implementation.

Base year: The CSO had revised the base year of the IIP from 2004-05 to 2011-12 in May 2017 to capture structural changes in the economy and improves the quality and representativeness of the indices. The revised IIP (2011-12) reflects the changes in the industrial sector and also aligns it with base year of other macroeconomic indicators like the Wholesale Price Index (WPI) and Gross Domestic Product (GDP).

Sector wise items and weightages: It covers 407 item groups. Sector wise, the items included falls into 3 categories viz. Manufacturing (405 items), Mining (1 items) & Electricity (1 item). The weights of the three sectors are 77.63%, 14.37%, 7.9% respectively. The revised 8 core Industries have combined weightage of 40.27% in IIP.


Core sector grows at 6.7% in January 2018

According to index of eight core industries released by Ministry of Commerce and Industry, Core sector growth has grown at faster pace of 6.7% in January 2018 against 3.4% in January 2017. The eight core sectors had grown by 4.2% in December 2017 and 7.4% in November 2017.

Key Facts

Cumulatively, the growth in eight core sectors during April-January this fiscal slowed to 4.3% as against 5.1% in the same period last fiscal. The growth in key sectors will have implications for Index of Industrial Production (IIP) as these eight segments account for about 41% of the total factory output.

Breakup of January performance:

  • Petroleum refinery production: It jumped up by 11%.
  • Cement output: It jumped up by 20.7%.
  • Electricity generation: Its growth rose to 8.2%.
  • Coal sector output: It improved by 3%.
  • Steel production: It grew by 3.7%.
  • Crude oil production: It dropped by 3.2%.
  • Fertiliser output: It dropped by 1.6%.
  • Natural gas: Its output fell by 1%.

Core Industry sector

Core industry can be defined as main industry of the economy. In most countries, there is particular industry that seems to be backbone of all other industries and it qualifies to be the core industry. In India, there are eight core sectors comprising of coal, crude oil, natural gas, petroleum refinery products, fertilisers, steel, cement and electricity.

Latest weightage in core sectors: Petroleum Refinery production (weight: 28.04%), Electricity generation (19.85%), Steel production (17.92%), Coal production (10.33%), Crude Oil production (8.98%), Natural Gas production (6.88%), Cement production (5.37%), Fertilizers production (2.63%)