Manufacturing Sector Current Affairs

IIP rises to 9-month high of 4.3% in August 2017

According to data released by Central Statistics Office (CSO), factory output measured in terms of Index of Industrial Production (IIP) has grown nine-month high to 4.3% in August 2017. This was mainly due to a robust performance of the mining and power sectors.

Key Facts

The manufacturing sector output grew 3.1% in August 2017, mining sector output surged 9.4% and electricity generation increased 8.3%. Production of capital good rose 5.4% in August 2017. Consumer durables output increased 1.6% and consumer non-durables output rose 6.9% in August 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.

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

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

Tags:

Union Cabinet approves amendment in Modified Special Incentive Package Scheme

The Union Cabinet has given its approval for amendment in the Modified Special Incentive Package Scheme (M-SIPS) for electronics manufacturing.

These modifications will further incentivize investments in electronic sector and move towards Union Government’s goal of ‘Net Zero imports’ in electronics by 2020. 

Key Amendment
  • The applications will be received under M-SIPS scheme till December 2018 or till such time that an incentive commitment of Rs 10,000 crore is reached, whichever is earlier.
  • In case the incentive commitment of Rs 10,000 crore is reached, a review will be held to decide further financial commitments.
  • For new approvals, the incentive under the scheme will be available from the date of approval of a project and not from the date of receipt of application.
  • The incentives will be available for investments made within 5 years from the date of approval of the project. Unit receiving incentive will provide undertaking to remain in commercial production for at least 3 years.
  • The Appraisal Committee chaired by Secretary, Ministry of Electronics and IT will recommend approval of project.
Significance of amendment in M-SIPS
  • Expedite investments into the Electronics System Design and Manufacturing (ESDM) sector in India.
  • Create employment opportunities and reduce dependence on imports. 

About Modified Special Incentive Package Scheme (M-SIPS)

  • The Union Cabinet in 2012 approved the M-SIPS to provide a special incentive package to promote large scale manufacturing in the ESDM sector to boost domestic electronic product manufacturing in the country.
  • The scheme provides subsidy for capital expenditure 20% for investments in Special Economic Zones (SEZs) and 25% in non-SEZs.
  • It also provides reimbursement of countervailing duty/excise for capital equipment for non-SEZ units and also reimbursement of duties and central taxes for some of the projects with high capital investments.

Tags:

123