Demonetisation fails to pull down industrial growth, IIP at 13-month high

The sharp rise was due to low industrial numbers in November 2015

Industrial production belied all expectations of huge adverse impact of demonetisation as the index rose 13-month high of 5.7% in November against a contraction of 1.8% in the previous month. However, the sharp rise was also due to statistical illusion — low industrial numbers in November 2015, which is called base effect in a technical jargon — and a sharp reversal of a 12-month declining trend in capital goods.

If this trend prevails in the coming months on wards, the advance estimates of 7.1% growth in the gross domestic production for 2016-17 need not be revised drastically in contrast to the