Diwali in 2015 was in November. In 2016, it was in November. Diwali is when factories tend to shut. So the Index of Industrial Production (IIP) looks weak year on year for that month. So the Diwali effect would mean that 2016’s data should look much better than 2015 (when factories would be shut for Diwali).
For 2016, we had demonetization which should have hurt production a lot, almost as much as Diwali, one thinks. The data says otherwise, with a 5.7% increase in the IIP year on year.
However you can see that it’s much lower than October. October was when factories shut for Diwali, remember, and the index number for November 2016 is much lower than October 2016. There is an impact of course.
October + November together – which negates the Diwali impact – has grown just 0.65%.
Here’s the sector growth. Everyhting’s done well and Mining shows you the Diwali impact too.
Finally, here’s a large pic of all the sectors. Click to zoom. Textiles and Auto have done really well – which is the total opposite of the narrative we hear!
Interesting data point. Not superbly bullish, but definitely not as negative as what we should have seen!