November 14, 2021, The Liberacy:- NSO data shows the industrial output to be at 3.1%, which is a new 7-month low, mainly because of the low base effect.
August 2020 recorded IIP at 12%, whereas September saw just 1% output in IIP, highlighted in the data released by National Statistical Office on 13 November 2021.
📣 The Liberacy is now on Telegram.
Click here to join our channel (@the_liberacy)
and stay updated with the latest News.
The new low in IIP output, shown in NSO data, may have concerns setting in the future and needs several interventions to stimulate demand and supply levels.
While the main reason of IIP slip is cited to be the fading base effect.
Consumer Price Index (CPI) rose to 4.48% in October as compared to 4.35% a month ago. The main reason behind the rise is said to be the food inflation that stands at 0.85 % compared to 0.68 % to the previous month.
The rise in fuel prices and an overall rise in commodity prices across the globe stand as the best reason for the increase in the consumer price index and food inflation.
RBI is expected to maintain no changes to its monetary policy for the rest of the fiscal because of the inflation rates, as said by the economist.
IIP consists of several sectors in which the manufacturing sector accounts for three-fourth of the total weightage given to IIP, and the manufacturing sector grew at 2.7% in September as compared to 9.9% in August 2021.
This lower percentage of the manufacturing sector is said to have been the driving force and dragging IIP down.
The non-availability of coal leads to a mere growth of 0.9 % in electricity production. The coal production in India fell to 8.1% in September from 20.6%in August 2021.
The impact of the recent cut in excise duty by the Central Government and VAT reduction by States on fuel prices is yet to be seen in the upcoming NSO data, as it is expected to lower the inflation and thus in CPI.
But remains in the question mark, in sight of higher global commodity price.
📣 The Liberacy is now on Telegram.
Click here to join our channel (@the_liberacy)
and stay updated with the latest News.