Manas Chakravarty
We had Diwali last November, which always affects production, as stocks are bought in advance, businesses are closed and workers go home. The index of industrial production was up a huge 8.5 per cent in November 2017, so there's a big unfavourable base effect. Conversely, October 2018 IIP growth of 8.4 per cent was on top of 1.8 percent growth in October 2017. Diwali was in October in 2017.
How do we get rid of the Diwali effect? We can combine the growth rates in October and November. By that yardstick, the average IIP growth during these two months, year-on-year, is about 4.5 percent, the same growth rate we had in September 2018.
For manufacturing, the average growth for October and November works out to 3.9 percent, lower than the 4.6 percent in September. Similarly, the average growth rate is a bit lower in the infrastructure/construction goods sector.
But the important message after clubbing the growth for October and November 2018 together is that overall industrial production growth continues to hold up well, without any slowdown.
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