The country’s industrial growth technically jumped 134 per cent year-on-year in April, mainly due to the base effect.

According to National Statistical Office (NSO) data, the Index of Industrial Production surged to 126.6 in April 2021 from 54.0 in the same month last year, when the nationwide lockdown to curb the spread of Covid-19 had brought production to halt at most units.

Cautioning about the number, the NSO said that since most units had reported ‘Nil’ production in April 2020, a comparison of the indices with this April was not right. The government held back release of complete data for April.

The IIP had expanded 24.14 per cent in March 2021 to 145.5, also mainly on base effect.

To put the IIP number in perspective, in April 2019, it had grown 4.3 per cent over the same month the previous year.

Aditi Nayar, Chief Economist with ICRA, said assessing the growth in April 2021 relative to the same month of 2019 would provide a clearer signal of the momentum in various sectors.

“Encouragingly, the pace of year-on-year industrial growth in April 2021 exceeded our expectations, and the index was in line with the pre-Covid level of April 2019,” she said. In particular, intermediate goods grew a heartening 11.5 per cent in April 2021 over the corresponding month of 2019, which may partly have been driven by exports. However, capital goods and consumer durables output trailed the April 2019 levels by 14.3 per cent and 11.6 per cent, respectively, which suggests that the local lockdowns impacted production, given the weakening outlook for investment activity and consumption in the near term.

“Month-on-month, manufacturing moderated by 12.6 per cent in April 2021, narrower than the slippage of 17.5 per cent in the GST E-way bills generated over the same period. This suggests that inventories may have built up, with dispatches affected by the second Covid surge in April,” Nayar said.

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