IIP shrinks 10.4% in July as recovery slows

“Part of the reason is local/partial/ weekend lockdown imposed in many parts of the country, often without much advance intimation. This is not allowing orderly recovery of economic activities,” Mr. Sinha said.

He noted that the IIP growth trend mirrors the GSDP weighted workplace mobility trend, which also flattened out in July and August after a sharp recovery in May and June, adding that “the process of industrial recovery will take a while and require sustained policy support.”

In its official statement releasing IIP data, the Ministry of Statistics and Programme Implementation repeatedly stated that, “It may not be appropriate to compare the IIP in the post pandemic months with the IIP for months preceding the COVID-19 pandemic.”

The Ministry pointed out that a large number of industrial establishments were not operating from the end of March due to the lockdown, adding that industrial activity is now resuming with the lifting of restrictions.

The manufacture of pharmaceuticals, which saw 22% growth, and tobacco products which posted 6.1% growth, were the only two sectors in positive territory in July.

The auto sector and paper and beverages manufacturing continued to see contractions over 30%. The declining trend in textile (-14.8%) and garment manufacturing (-28.7%) could be important from an employment perspective.