Industrial Production Grows 11.5 Per Cent In July On Low-Base Effect Amid Signs Of Recovery In Pandemic

The surge in industrial production in July is mainly on account of a low-base effect and better performance by manufacturing, mining and power sectors.

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New Delhi: India's economy reeling under the effect of pandemic has shown signs of recovery as industrial production rose 11.5 per cent in July, according to the data released by the National Statistical Office (NSO) on Friday. The manufacturing sector’s output also witnessed a 10.5 per cent surge in July 2021, as per the Index of Industrial Production (IIP) data.

What’s the reason for surge in industrial production?

The surge in industrial production in July is mainly on account of a low-base effect and better performance by manufacturing, mining and power sectors. However, the output remained slightly below the pre-pandemic level.

The mining sector output rose 19.5 per cent in July while power generation increased 11.1 per cent.

The IIP had contracted 10.5 per cent in July 2020. During April-July this year, the IIP grew 34.1 per cent.  It contracted 29.3 per cent in the same period last year, as per the news agency PTI. Industrial production was severely affected owing to pandemic since March 2020, when it had contracted 18.7 per cent. It further declined 57.3 per cent in April 2020 due to staggered economic activities due to lockdown restrictions imposed to curb the spread of coronavirus infections.

In May 2021, IIP rose 28.6 per cent and in June, it grew 13.6 per cent. The second wave of the pandemic started in the middle of April this year and many states imposed restrictions to curb the spread of coronavirus infections.

"The growth rates over corresponding period of previous year are to be interpreted considering the unusual circumstances on account of COVID-19 pandemic since March 2020," NSO said in a statement.