economy | IST

Editor's take: July IIP rises due to low base effect; power, infra showing improvement

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Industrial output for July came in yet again at a double-digit of 11.5 percent. This was because of the low base a year ago at -10.4 percent. The 11.5 percent was in line with CNBC-TV18 poll.

Industrial output for July came in yet again at a double-digit of 11.5 percent. This was because of the low base a year ago at -10.4 percent. The 11.5 percent was in line with CNBC-TV18 poll.
The industrial output in July is in line with expectations of double-digit growth, but if one looks at the index numbers of production, the overall industrial production is still lower than the pre-COVID July of 2019, indicating a tepid recovery.
The worst message from the July IIP came from the consumer goods sector. Consumer non-durables like soaps, toothpastes and food are down from last year levels and are at par with 2019, indicating limp demand.
Durable goods have apparently done worse and are lower than 3-year ago levels. Even capital goods are barely recovering but the consolation is that infrastructure and intermediate goods like chemicals, are doing well. The best performance has come from power, which has been steadily improving.
Overall, the message is consumption is not firing as an engine for growth, but government investment in power and infrastructure is showing improvement.
Watch the accompanying video of CNBC-TV18’s Latha Venkatesh for more.
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