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IIP Falls Marginally in Dec 2012

The Index of Industrial Production (IIP) in December 2012 has fallen 0.55% from Dec 2011. This supposedly indicates lower growth but I find the index so ludicrously volatile there is just no point doing YoY growth analysis. But I’ll do it anyhow.


Note that even the absolute numbers don’t inspire confidence. Seasonally adjusted numbers, available at, show that Jan numbers have some layer of confidence, where the seasonally adjusted number is more than 7%.

Looking at components:


and more, at use based indexes:


The consumer goods section (durables+non-durables) has fallen off a cliff.

Note however that because Diwali was in November in 2012, and in October in 2011, and Diwali is huge on consumer uptake, the calendar effect will skew results substantially. We should wait until revisions are in and the Jan-Feb-March numbers before making any conclusions. However I would be suspicious of using IIP data alone anyhow.

Revisions:The figure for Nov 2012, initially announced at –0.12%, has been revised down to –0.84%.

  • Paul says:

    Normally with high inflation, we used to see massive unrest in population. It could be riots, organized protests and other mob violence.
    We are not seeing that in India on a large scale – Does it mean that we are ready for this level of inflation in India?

  • Vidyanshu says:

    I think along with inflation, the populace is feeling a wealth effect phenomenon. So they think they have enough money, no matter what. All the riots and arab spring effects will be felt if growth slows down and there is a real estate bust. UPA is aware of this and Chiddu is trying his best to recapitalize banks and pump liquidity by hook or crook, till the elections are over in 2014.