Macro economic parameters improved in terms of industrial production in volume terms and wholesale price index under the new series of these indices. While the index of industrial production (IIP) rose 2.7% in March as against 1.9% in February, WPI inflation declined to a four-month low of 3.85% in April as compared to 5.29% in the previous month.
Inflation on the consumer price index, which has already been revised to a new series, declined to 2.99% in April as against 3.81% in the previous month.
The new series, launched on Friday, saw the base year in the two indices shifted to 2011-12 as against earlier 2004-05 to bring them in parity with other macroeconomic numbers such as the consumer price index and the gross domestic product.
The new series of IIP showed higher growth rates in most months in the period April 2012 to March 2017, as compared to the existing series. This is attributable to shifting of base to a more recent period; increase in number of factories in panel for reporting data and exclusion of closed ones and inclusion of new items and exclusion of old ones.
For instance, in none of the months in 2016-17, IIP contracted in new series. While it declined in six months-- April, July, August, October, December and February-- in old series. If one assumes that demonetisation did not have much impact in November, 2016 as the impact would have come with a lag impact. The four months, starting from December to March, did not see IIP return to the level of November, which had grown by 5.7% in November. The same trend was found even in old series where November IIP growth was 5.6%, the highest growth in the post-demonetisation period. However, manufacturing growth declined to 1.2% in March against 1.4% in the previous month.
This is the lowest growth in a three-month period, but was higher than 0.9% in December, which was the worst affected due to demonetisation. Mining saw a stupendous growth of 9.7% in March as against 4.6% in February, while electricity generation rose 6.2% as compared to 1.2% over this period. Cumulatively, IIP grew 5% in 2016-17 against 3.4% in the previous year.
The growth would have been dismal under the old series. It would have been 0.7% in 2016-17 as against 2.5% in the previous year. In the new series of IIP, 809 items are there as compared to 620 in the old one. As many as 149 items such as steroids, cement clinkers, pre-fabricated concrete blocks, refined palm oil have been added in the new series, while 124 items such as calculators, colour TV picture tubes, gutka have been deleted.
Weight of manufacturing in IIP increased to 77.6% from earlier 75.5%, while that of mining reduced to 14.3% from 14.1% and electricity to 7.9% from 10.3%. In new series of WPI, number of items covered increased from 676 to 697. In all, 199 new items have been added and 146 old items have been dropped. In the primary articles, new vegetables and fruits such asradish, carrot, cucumber, bitter gourd, mosambi, pomegranate, jack fruit, pearhave been added.
In the mineral group, items like copper concentrate, lead Concentrate and garnet have been added whereas copper ore, gypsum, kaolin, dolomite, magnesite have been deleted. Natural gas has been added as a new item. In manufacturing items, around 173 new items like conveyer belt, rubber tread, steel cables, tissue paper, wooden splint, have been added, while 135 items like khandsari, papad, video CD-Players, etc., have been dropped.
Weights of manufactured items decreased to 64.2% in WPI in the new series from 64.9% in old series and fuel and power to 13.1% from 14.9%, while those of primary items rose to 22.6% from 20.1%.