The release of quick estimates of Index of Industrial Production (IIP) for the month of September, 2021 shows a sustained increase in industrial production in India. The IIP, in FY 2021-22, has grown from an average of 121.3 in Q1 to 130.2 in Q2. The IIP in Q2 would have been still higher but for heavy monsoons disrupting mining activity, especially coal and consequently electricity generation, that repressed the growth of overall production index.

The manufacturing index in IIP has held steady and is likely to rise in subsequent months mirroring the eight-month high in Purchasing Manager’s Index (PMI) for manufacturing reaching 55.9 in October 2021, the Indian Ministry of Finance said in a press release.

A sharp increase in capital goods index from an average of 74 in Q1 of FY 2021-22 to 91.7 in Q2 underscores a significant recovery in investment.

There are clear signs of investment being induced by rise in consumption in FY 2021-22 as consumer durables index increases from 91.7 in Q1 to 121.2 in Q2, while consumer non-durables index also moves up from 139.1 to 146.9 across the two quarters.

The release of Consumer Price Index (CPI) numbers for the month of October 2021 shows that the decline in annual consumer price inflation has now gradually set in FY 2021-22. The annual CPI inflation has declined from 5.6 per cent in Q1 to 5.1 per cent in Q2 and it is lower still at 4.5 per cent in October of FY 2021-22.

Activity levels have been steadily increasing in FY 2021-22 as reflected in the latest levels of several High Frequency Indicators including E-way bills, power consumption and GST collections. GST collections have soared in FY 2021-22 to reach its second highest monthly collections ever of Rs. 1.3 lakh crore in October, 2021, reflecting robustness of growth revival.

Exports are visibly emerging as the engine of growth for India’s economy having crossed $30 billion for the seventh successive month in October of FY 2021-22. On a cumulative basis, India’s merchandise exports in April-October stood at $232.58 billion, up 54.5 per cent over the same period in 2019.