Table of Contents
WHAT IS IIP?
- According to the CSO,
- “It is a composite indicator that measures the short-term changes in the volume of production of a basket of industrial products during a given period with respect to that in a chosen base period.”
COMPONENTS OF IIP
USE-BASED CLASSIFICATION OF INDUSTRIES UNDER IIP
CORE INDUSTRIES IN THE IIP-40.27% WEIGHTAGE
IMPACT OF LOCKDOWN
- Several of the core sector industries were given exemptions under the lockdown.
- Electricity and steel are continuous processes and have not been stopped.
- But movement of goods faced major restrictions, so it could be that they reduced production as much as possible
- to deal with reduced demand
REDUCTION IN CAPITAL EXPENDITURE
- March core sector data also reflected the cut in capital expenditureby both state and central governments
- in order to make up for falling tax revenues.
- This trend is bound to continue because both government and private demand for infrastructure investment has collapsed,
GOING FORWARD IN APRIL
- Going forward to April, it expected these trends to worsen but within the same magnitude.
- Demand has fallen drastically in the power sector due to the full lockdown this month, and gas powered plants
- were likely to have been shut down.
- Coal may also dip for April.
- While cement production will fall sharply as all construction activity came to a halt
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