FREE

MOSL: ECOSCOPE-IIP grew 5% in FY17, not 0.5%-Like GDP, the new IIP series shows way more robust growth than the old series

​ECOSCOPE: IIP grew 5% in FY17, not 0.5%; Like GDP, the new IIP series shows way more robust growth than the old series

• As per the new series with 2011-12 as the base year, the index of industrial production (IIP) grew 2.7% YoY in March 2017, better than +1.9% in February. In March 2017, while the manufacturing sector grew at the slowest pace in three months, mining activities increased rapidly.
  
• One of the most important changes in the new IIP series was the introduction of the infrastructure/construction component (with 12.3% weight) and capturing of ‘work in progress’ in the capital goods sector.
  
• A comparison of the old series with the new series reveals huge differences. Although IIP contracted 9 times in past 16 months, there has not been a single decline in IIP since June 2013, as per the new series. In fact, IIP is estimated to have grown 5% as per the new series, way better than +0.5% in April-February FY17.
  
• Although the new series has revised IIP growth upward, it still does not match with real GVA growth of the industrial sector. This, thus, continues to remain the biggest drawback of the IIP series.