Strong services revival coupled with rising industrial growth ignites Index of Industrial Production
The index of industrial production (IIP) for September 2021 highlights that there has been a sustained increase in industrial production as the IIP has grown to 130.2 in Q2 from 121.3 in Q1. Even, the manufacturing index in IIP has also been steady and it’s likely to rise in the upcoming months. It also mirrors the 8-month high in purchasing manager’s index which has risen to 55.9 in October 2021.
Moreover, capital goods index has also increased sharply to 91.7 in Q2 from the earlier average of 74 in Q1 of the last financial year and it showcases a momentous recovery in investment. In addition, there has been an obvious signs of investment that has been induced by rising consumption in FY 2021-22.
Consumer food price inflation has also eased in October as disruptions in food distribution has been eased considerably. E-way bills, power consumption and GST collections have also increased steadily in FY 2021-22 due to increased activity levels. Along with all these positive signs of improvements, GST collections have also soared reaching to its second highest monthly collection of Rs 1.3 lakh crore in the month of October.
With the weakening of the pandemic, PMI services have also accelerated which suggests a strong revival in services sector. Even Hotel Occupancy rate in holiday destination is also rising to 60 per cent in second quarter from 55 per cent in the first quarter and its shows growing optimism in service sector. Exports in the economy have also crossed 30 billion dollar for the seventh successive month in October.
