IIP reworked, slower growth in Apr.-Nov.

By Our Special Correspondent

NEW DELHI, JAN. 12. Quick estimates of industrial production released by the Central Statistical Organisation (CSO) today reveal that industrial production grew by 6.5 per cent during November against a 3.8 per cent rise in the same month in 1999. With this, the cumulative growth of industrial production during April-November 2000 clocked 6 per cent against 6.2 per cent during the same period of 1999.

The CSO has also taken note of the criticism that it has attracted due to the revisions in the index of industrial production (IIP), especially in the monthly indices and growth patterns during November 1999 and March 2000. Consequently, it has decided to re-compute the indices from April 1998 onwards. Accordingly, the figures for November 2000 are the revised indices.

Statistics for November reveal that the mining sector grew by 4.8 per cent against 0.1 per cent in the same month of the previous year, manufacturing by 6.5 per cent (3.7 per cent) and electricity generation by 7.8 per cent (8.5 per cent). The cumulative growth during April-November in these sectors was 4.1 per cent (0.5 per cent), 6.3 per cent (6.6 per cent) and 4.9 per cent (8.2 per cent), respectively.

Use-based classification for November shows that basic goods production was up 5.9 per cent (4.3 per cent), intermediate goods by 4.6 per cent (negative 0.4 per cent) while capital goods production was down 0.1 per cent (against a positive growth of 9 per cent). Consumer durables recorded a growth of 19.6 per cent (6 per cent) while consumer non-durables were up 8.8 per cent (6.1 per cent), which led to an overall growth of 11.4 per cent in the consumer goods sector against 6.1 per cent in November 1999.

The corresponding figures for April-November show that basic goods production was up 5.3 per cent (5.3 per cent during the same period of the previous year), intermediate goods by 4.8 per cent (8.6 per cent) and capital goods by 3.7 per cent against 8.2 per cent. Consumer durables were up 19.6 per cent (13.1 per cent), consumer non-durables by 5.3 per cent (1.6 per cent) and consumer goods segment as a whole by 8.8 per cent (4.3 per cent).

In the two-digit industry group, 13 out of the 17 segments have shown positive growth during November. Metal products and parts, except for machinery and equipment, have shown the highest growth of 27.7 per cent, followed by a 23.5 per cent growth in wood and wood products, furniture and fixtures and 14.6 per cent growth in rubber, plastic, petroleum and coal products. On the other hand, non-metallic mineral products have reflected a decline of 11.2 per cent; paper and paper products and printing, publishing and allied industries were down 9.4 per cent and wool, silk and man- made fibres were down 4.9 per cent.

Elaborating on the revised indices, the CSO said that it had noticed that production of four items - radio receivers, photosensitised paper, chassis (assembly) for heavy commercial vehicles and engines included in the item basket of IIP were reported by `single producers' to the Department of Industrial Policy and Promotion and were prone to significant month to month variations. This had led to extreme fluctuations in the monthly indices and growth patterns, especially during November 1999 to March 2000.

Therefore, in consultation with the Ministries concerned, the CSO has decided to delete these items from the item basket and re- distribute their weights among the remaining items of the respective two-digit groups. It has also decided to re-compute the indices from April 1998 onwards. The decision is based on the consideration that the IIP is only a short term indicator and the results of the Annual Survey of Industries for the factory sector up to 1997-98 have already become available for use in various economic indicators. It was also observed that the deletion of the above items had a negligible impact on indices and growth rates for the years 1994-95 to 1997-98, the CSO said.

In a further clarification, CSO has said that the Indian Bureau of Mines (IBM) has revised monthly indices of the mining sector from April 1994 onwards by incorporating the production of natural gas by the private sector and joint venture companies and the internal utilisation part of the natural gas production by the public sector. In order to ensure comparability in the time series of indices, the monthly series of all-India IIP has been revised by incorporating the new indices of mining furnished by the IBM from April 1994 onwards.

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