I have always found it difficult to understand the IIP nos. Every month, i try to pour into the details of the nos to make sense out of them, yet i find it difficult to do so. One big example is simply the figures for Electricity. Broadly, the IIP is divided into three sectors, Mining, Manufacturing and Electricity. Now consider this..
Comparing August with June this year. Mining in August stood at 181.1 vs 181.3 in June, whereas Manufacturing in August stood at 313 vs 313.1. Both slightly lower as compared to two months earlier. Yet look at Electricity. It stands at 245.1 vs 234.4 in June, a good 4.5% jump. That should be good news but a question is where did this electricity go? If mining and manufacturing both were very slightly down, surely the 4.5% jump in Electricity should have eased the residential shortage. Did you notice fewer power cuts in August?
Now lets compare March with August. The figures for March were; Mining 209.8, Manufacturing 326.9. Both much higher than the figure for August. You bet Electricity must have been much higher than 245.1 in August! Did you bet? If you did, you have lost it. For Electricity in March was 241.3.
Ah! now, this is interesting. If with almost 1.5% less Electricity, we could mine and manufacture much more, it surely means that the much better performance in August on the Electricity front, must have meant much improved household supply (surely we needed less than 241.3 in August for the industrial production). If we did not notice much lower power cuts, then where did Electricity go? Any answers?
Disclaimer - On stock markets, my views may not be used to make investment decisions. I may or may not hold positions in the market. My views on Economics often contradict the stand of mainstream economists.
Monday, October 12, 2009
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Hi GK,
ReplyDeleteI would like to read your all post regularly, so it possible for you to send me the post via email whenever you upload on your blog?
My emial id is: abhi_gajjar1988@yahoo.com
Thanks,
Abhishek