The index of industrial production (IIP) for the month of April 2017 came in at 3.1%; lower than the 3.8% IIP recorded in the month of March 2017. Manufacturing growth, which constitutes nearly 75% of the overall IIP growth, continues to be tepid compared to mining and electricity. That divergence could be largely explained by the fact that the mining and electricity segment are largely driven by government policy and legislations and it has been positive for both these sectors. However, the manufacturing sector output largely depends on the private sector, which has not been able to increase its production due to insufficiency of demand.

In fact, if one looks at the chart below, the IIP has been on a consistently downward trend since the middle of last year. With most industrial sectors operating at around 70% of overall capacity and demand growth being tepid, IIP was largely driven down by the manufacturing factor. In fact the demonetization drive that commenced in November 2016 was largely instrumental in steepening the fall in IIP. In fact, till November 2016, the manufacturing growth was above the overall IIP. It is only after November, that the manufacturing has dipped below the overall IIP and exerted downward pressure on the overall IIP. But first, how demonetization impacted the IIP?

Delineating the demonetization effect on IIP..
How to deal with Demonetization

Getting clues from the sector-wise performance of IIP..


Currency and Forex Trading

Demonetization pressure may actually be receding..