ECONOMYBase effect: Factory output up in April by 13.4%

Base effect: Factory output up in April by 13.4%


India’s industrial production rose 134.4% in April from a year ago, boosted by the low base in April 2020 when the country went into a lockdown induced by the Covid-19 pandemic.

However, month on month industrial production declined 13% in April, indicating moderation in economic activity due to the second Covid-19 wave.

The government said the data was not comparable on an annual basis.

Like last year, it released only the index numbers for the Index of Industrial Production (IIP) without computing growth figures for the month.

The 134.4% growth rate for April is computed from the index numbers.

Industrial production contracted by 57.3% in April last year as the nationwide lockdown froze economic activity. This has resulted in a statistical boost this year.

Industrial production had risen 24.14% in March 2021.

“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,” the National Statistical Office said in a statement.

Experts said the April 2021 numbers can only be compared with April 2019 and March 2021 figures.

“Size of industrial output in April 2021 is same as it was two years ago in April 2019,” said Sunil Kumar Sinha, principal economist, India Ratings.

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