NEW DELHI: India’s factory output surged a massive 134.4% in April, primarily helped by the low base effect of the year-ago period when the Centre had imposed a nationwide lockdown, to limit the spread of the pandemic, bringing to a halt all economic activities as factories and offices shut down.
This surge may lead to a false sense of normalcy, given that the second wave of the covid-19 pandemic and slow vaccine rollout are widely expected to delay any meaningful economic revival in Asia’s third-largest economy.
In April last year, the index of industrial production (IIP) had contracted 55.5%. The favourable base may keep IIP numbers buoyed till August this year.
The national Statistical Office did not formally compute the April IIP numbers though it provided the indices for the month.
According to government data, the industrial output index rose to 126.6 in April from 54.0 in April last year, when the lockdown hit the production.
“It may be noted that the nationwide lockdown and other measures implemented to restrict the spread of Covid 19 pandemic from the end of March 2020, had led to a majority of the establishments not operating in April 2020 and consequently, there were many units which reported ‘Nil’ production, affecting comparison of the indices for the months of April 2020 and April 2021,” the National Statistical Office said.
Most economic forecasters have slashed their FY22 GDP projection for India to single digits as the second wave of the pandemic is expected to have significant impact on consumer sentiment and also is likely to have hit rural demand. The World Bank earlier this week pared down its FY22 growth projection for India to 8.3% for FY22 from 10.1% estimated in April.
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