IIP growth slips to 2.7% in March

  • IIP growth slips to 2.7% in March

IIP growth slips to 2.7% in March

The government today came out with the new series of wholesale inflation data under which the base year for calculating the macroeconomic indicators has been revised to 2011-12 from 2004-05 earlier.

India's wholesale inflation or Wholesale Price Index (WPPI) for April increased by 3.85 percent for the dame month past year, government data released on Friday said.

Annual growth rate of IIP in 2016-17 would have been 0.7 percent with 2004-05 as the base year, contrary to a healthy 5 percent jump under the revised base.

Mining production growth grew 9.7 percent during March, compared to February's 4.6 percent jump. The new Index of Industrial Production, IIP series captures work in progress for capital goods to avoid volatility. "The other change is that the WPI will no longer incorporate indirect taxes, which means they will be insulated from policy changes". It has 407 item groups, as against 399 in old series. Similarly, the figure for 2016-17 was 0.7 per cent as against 2.4 per cent in the previous fiscal.

Wholesale price inflation is expected to have slowed last month to 4.79 per cent from 5.70 per cent in March, according to the poll.

Further, it added that the number of source agencies reporting data for compilation of IIP in the new series will be 14 as compared to 15 earlier.

For enabling dynamic revision of the methodology of IIP including the item list and the panel of factories during the currency of a base year, a Technical Review Committee, chaired by Secretary, Ministry of Statistics &PI, will be constituted.

"The growth in the manufacturing sector has seen a marked improvement under the new series which only raises the hope of having a high growth of the sector in coming months as measures taken by the Government yields results" said Mr. Patel. New item basket in manufactured products reflects changed structure of the economy.

At a broad level, the new series has a total of 809 items in the manufacturing sector.

The IIP base year has also been changed to ensure that it remains more relevant in the years that it is operational, Chief Statistician of India TCA Ananth said at the joint briefing. This will mean WPI inflation, which fell to 3.85 per cent, will not reflect the impact of GST when it is implemented.