Production of electrical machinery has rebounded in June 2020, when compared to May 2020, as judged from recently-released official statistics.
The Ministry of Statistics & Programme Implementation (MOSPI) released the Index of Industrial Production (IIP) for June 2020, on September 11, 2020. The figures show a clear recovery of industrial activity in June 2020 when compared to the performance in the two preceding months.
It is of course not prudent to compare the performance in the lockdown-affected first quarter of FY21 (April 2020 to June 2020) to that in FY20.
The IIP for electrical machinery for March 2020 stood at 71.4. This slumped to 5.7 in April 2020 (the peak of the lockdown), only to recover to 31.1 in May 2020 and to 60.7 in June 2020.
It may be noted that the base year for IIP calculations is 2011-12, denoted as FY12. The interpretation of the indices discussed above is that in March 2020, production of electrical machinery was 71.4 per cent of the average production in FY12. When one sees the index for April 2020, at just 5.7, one can easily imagine the profundity of the lockdown’s impact.
Also read: Life beyond the pandemic
Performance over the years
During the long-term period ranging from FY13 to FY20, one can see that the electrical equipment machinery segment has had two distinct phases—one showing consistent growth and the other, retardation. During the four-year period FY13 to FY16, the electrical machinery industry showed annual growth rates of 13 per cent, 3.9 per cent, 3.9 per cent and 5.2 per cent, respectively (see table). However, in the second part—from FY17 toFY20—the segment has shown year-on-year growth in production only in one year, which is FY19. In the remaining three years, there has been a decline in production with FY18 suffering the sharpest decline, of 12.4 per cent.
The following table shows growth in the electrical machinery segment, over the years. The capital goods industry, in which are included some electrical machinery items, is also included in the table for the sake of comparison.
| Index of Industrial Production: % change over previous year | ||||||||||
| Apr-Mar (Full Year) | Apr-Jun (Q1) | |||||||||
| FY13 | FY14 | FY15 | FY16 | FY17 | FY18 | FY19 | FY20 | FY20 | FY21 | |
| Electrical Machinery | 13.0 | 3.9 | 3.9 | 5.2 | -4.5 | -12.4 | 2.5 | -4.5 | -5.9 | -68.0 |
| Capital Goods | 0.3 | -3.7 | -1.1 | 3.0 | 3.2 | 4.0 | 2.7 | -13.9 | -3.6 | -64.4 |
| Overall | 3.3 | 3.3 | 4.0 | 3.3 | 4.6 | 4.4 | 3.8 | -0.8 | 3.0 | -35.9 |
The electrical machinery index has a weight of 3 per cent (2.9983 per cent, to be precise) in the overall Index of Industrial Production. In terms of its weight, it can be compared loosely to the textile’s industry. The weight, it may be mentioned, ultimately reflects the share in value addition of the overall industrial sector.
The author of this article, Venugopal Pillai, is Editor, T&D India, and may be reached on venugopal.pillai@tndindia.com. Views expressed here are personal.