Industry and Infrastructure 2021-22 | RBI Grade B Phase 1 Preparation - Bank Exams PDF Download

 Page 1


CHAPTER
08
Global Industrial activity continued to be affected by the disruptions caused by the 
COVID-19 pandemic. While the Indian industry was no exception to these disruptions 
,its performance has improved in 2021-22. Gradual unlocking of the economy, record 
vaccinations, improvement in consumer demand, continued policy support towards 
industries by the government in the form of AtmaNirbhar Bharat Abhiyan and further 
reinforcements in 2021-22 have led to an upturn in the performance of the industrial 
sector. The growth of the industrial sector, in the first half of 2021-22, was 22.9 percent 
vis a vis the corresponding period of 2020-21and is expected to grow by 11.8 percent 
in this financial year. The industrial performance has shown improvement as reflected 
in the cumulative growth of the IIP. During April-November 2021-22 the IIP grew at 
17.4 percent as compared to (-)15.3 percent in April-November 2020-21. According to 
RBI- Studies on Corporate Performance, which is based on the results of select listed 
companies in the private corporate sector, the net profit to sales ratio of large corporates 
reached an all-time high despite the pandemic. Buoyant FDI inflows amid improvements 
in overall business sentiments, foretells a positive outlook for the industry.
The introduction of the production linked incentive scheme (PLI) to encourage scaling up 
of industries and major boost provided to infrastructure-both physical as well as digital–
combined with continued measures to reduce transaction costs and improve ease of doing 
business, would support the pace of recovery. Several initiatives such as the National 
Infrastructure Pipeline (NIP), National Monetization Plan (NMP), amongst others, have 
been taken to propel the infrastructure investment. Capital expenditure for the Indian 
Railways has been substantially increased from an average annual of Rs. 45,980 crores 
during 2009-14 to Rs. 155,181 crores in 2020-21 and it has been budgeted to further increase 
to Rs. 215,058 crores in 2021-22. This implies five times increase in comparison to the 2014 
level. In addition, the extent of road construction per day increased substantially in 2020-21 
to 36.5 kms per day from 28 kms per day in 2019-20, a rise by 30.4 percent as compared 
to the previous year. The Government has also heralded a major boost to the electronics 
hardware sector and brought in structural and procedural reforms in the telecom sector .
Industry and Infrastructure
INTRODUCTION
8.1 COVID-19 pandemic led to disruptions in global economic activity impacting not only 
the lives but also livelihoods. The Indian industry experienced interlude in business activity 
leading to slowdown in its performance. With the gradual unlocking of the country coupled 
Page 2


CHAPTER
08
Global Industrial activity continued to be affected by the disruptions caused by the 
COVID-19 pandemic. While the Indian industry was no exception to these disruptions 
,its performance has improved in 2021-22. Gradual unlocking of the economy, record 
vaccinations, improvement in consumer demand, continued policy support towards 
industries by the government in the form of AtmaNirbhar Bharat Abhiyan and further 
reinforcements in 2021-22 have led to an upturn in the performance of the industrial 
sector. The growth of the industrial sector, in the first half of 2021-22, was 22.9 percent 
vis a vis the corresponding period of 2020-21and is expected to grow by 11.8 percent 
in this financial year. The industrial performance has shown improvement as reflected 
in the cumulative growth of the IIP. During April-November 2021-22 the IIP grew at 
17.4 percent as compared to (-)15.3 percent in April-November 2020-21. According to 
RBI- Studies on Corporate Performance, which is based on the results of select listed 
companies in the private corporate sector, the net profit to sales ratio of large corporates 
reached an all-time high despite the pandemic. Buoyant FDI inflows amid improvements 
in overall business sentiments, foretells a positive outlook for the industry.
The introduction of the production linked incentive scheme (PLI) to encourage scaling up 
of industries and major boost provided to infrastructure-both physical as well as digital–
combined with continued measures to reduce transaction costs and improve ease of doing 
business, would support the pace of recovery. Several initiatives such as the National 
Infrastructure Pipeline (NIP), National Monetization Plan (NMP), amongst others, have 
been taken to propel the infrastructure investment. Capital expenditure for the Indian 
Railways has been substantially increased from an average annual of Rs. 45,980 crores 
during 2009-14 to Rs. 155,181 crores in 2020-21 and it has been budgeted to further increase 
to Rs. 215,058 crores in 2021-22. This implies five times increase in comparison to the 2014 
level. In addition, the extent of road construction per day increased substantially in 2020-21 
to 36.5 kms per day from 28 kms per day in 2019-20, a rise by 30.4 percent as compared 
to the previous year. The Government has also heralded a major boost to the electronics 
hardware sector and brought in structural and procedural reforms in the telecom sector .
Industry and Infrastructure
INTRODUCTION
8.1 COVID-19 pandemic led to disruptions in global economic activity impacting not only 
the lives but also livelihoods. The Indian industry experienced interlude in business activity 
leading to slowdown in its performance. With the gradual unlocking of the country coupled 
266 Economic Survey 2021-22 
with supportive policy initiatives which included easing of supply side bottlenecks through 
easier access to credit especially, emergency credit line guarantee scheme to MSMEs, relief to 
the real estate sector, production-linked incentives for 14 champion sectors and other direct tax 
measures, the industrial growth started to recover. In the past few months, record vaccinations as 
well as improvement in consumer demand and business confidence have had a positive impact 
on the performance of the industrial sector. This period also saw a boost to digital infrastructure, 
structural reforms in telecommunications and big-ticket disinvestment in Air India. The pace of 
this recovery and further growth is likely to continue due to consistent efforts of the government 
to bring in various structural, fiscal and infrastructural reforms in addition to a slew of measures/
schemes like the production linked incentive scheme (PLI) to support industries .
8.2	 The	 gross	 value	 addition	 at	 constant	 prices	 (GV A)	 in	 the	 industrial	 sector	 grew	 at	 the	
compound	 annual	 growth	 rate	 (CAGR)	 of	 4.53	 percent	 between	 201 1-12	 and	 2019-20	 while	
total	 GV A 	 grew	 by	 CAGR	 of	 5.63	 percent	 over	 the	 same	 period.The	 share	 of	 the	 industrial	
sector	 in	 the	 nominal	 GV A(at	 current	 prices)	 was	 25.9	 percent	 in	 2020-21.W ith	 the	 industrial	
sector	 recovering	 and	 expec ted	 to	 grow	 at	 1 1.8	 percent,	 as	 per	 advance	 estimates	 for	 2021-22	 by	
National	Statistical	Office,	industry’ s	share	is	expected	to	increase	to	28.2	percent.	(Figure	1).
8.3	 Manufacturing,	 with	 an	 average	 share	 of	 16.3	 percent	 in	 nominal	 GV A 	 over	 the	 last	 decade,	
has	 a	 dominan t	 presence	 within	 the	 industrial	 sector .	 In	 2020-21,	 the	 share	 of	 manufacturing	 fell	
to	 14.4	 percent	 but	 is	 expected	 to	 improve	 to15.3	 percent	 in	 2021-22.	 The	 share	 of	 electricity	 has	
been	 showing	 an	 increasing 	 trend	 since	 2012-13	 and	 was	 2.7	 percent	 2020-21.	 Figures	 1	 and	 2	
show	 value	 added	 in	 the	 industrial	 sector	 and	 growth	 respectively .	 In	 2020-21,	 electricity ,	 gas,	
water supply and other utility services was the only sub sector that had experienced a positive 
growth	 of	 1.9	 percent	 (table	 1).	 In	 2021-22,	 the	 manufacturing	 sector	 is	 expected	 to	 grow	 by	
12.5	 percent,	 mining	 and	 quarrying	 by	 14.3	 percent,	 construction	 by	 10.7	 percent	 and	 electricity ,	
gas	 and	 water	 supply	 by	 8.5	 per	 cent.	 This	 improveme nt	 is	 on	 the	 back	 of	 industrial	 contraction	
in	the	corresponding	period	of	the	last	financial	year .	
Figure 1: Share of Industry and its components in Gross value added
 
 
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
3rd RE 2nd RE 1st RE PE 1st AE
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22
Share in GVA 
Mining & quarrying Manufacturing
Electricity, gas, water supply & other utility services Construction
Industry
Source: Survey calculations based on MoSPI data. Data at current prices.
Page 3


CHAPTER
08
Global Industrial activity continued to be affected by the disruptions caused by the 
COVID-19 pandemic. While the Indian industry was no exception to these disruptions 
,its performance has improved in 2021-22. Gradual unlocking of the economy, record 
vaccinations, improvement in consumer demand, continued policy support towards 
industries by the government in the form of AtmaNirbhar Bharat Abhiyan and further 
reinforcements in 2021-22 have led to an upturn in the performance of the industrial 
sector. The growth of the industrial sector, in the first half of 2021-22, was 22.9 percent 
vis a vis the corresponding period of 2020-21and is expected to grow by 11.8 percent 
in this financial year. The industrial performance has shown improvement as reflected 
in the cumulative growth of the IIP. During April-November 2021-22 the IIP grew at 
17.4 percent as compared to (-)15.3 percent in April-November 2020-21. According to 
RBI- Studies on Corporate Performance, which is based on the results of select listed 
companies in the private corporate sector, the net profit to sales ratio of large corporates 
reached an all-time high despite the pandemic. Buoyant FDI inflows amid improvements 
in overall business sentiments, foretells a positive outlook for the industry.
The introduction of the production linked incentive scheme (PLI) to encourage scaling up 
of industries and major boost provided to infrastructure-both physical as well as digital–
combined with continued measures to reduce transaction costs and improve ease of doing 
business, would support the pace of recovery. Several initiatives such as the National 
Infrastructure Pipeline (NIP), National Monetization Plan (NMP), amongst others, have 
been taken to propel the infrastructure investment. Capital expenditure for the Indian 
Railways has been substantially increased from an average annual of Rs. 45,980 crores 
during 2009-14 to Rs. 155,181 crores in 2020-21 and it has been budgeted to further increase 
to Rs. 215,058 crores in 2021-22. This implies five times increase in comparison to the 2014 
level. In addition, the extent of road construction per day increased substantially in 2020-21 
to 36.5 kms per day from 28 kms per day in 2019-20, a rise by 30.4 percent as compared 
to the previous year. The Government has also heralded a major boost to the electronics 
hardware sector and brought in structural and procedural reforms in the telecom sector .
Industry and Infrastructure
INTRODUCTION
8.1 COVID-19 pandemic led to disruptions in global economic activity impacting not only 
the lives but also livelihoods. The Indian industry experienced interlude in business activity 
leading to slowdown in its performance. With the gradual unlocking of the country coupled 
266 Economic Survey 2021-22 
with supportive policy initiatives which included easing of supply side bottlenecks through 
easier access to credit especially, emergency credit line guarantee scheme to MSMEs, relief to 
the real estate sector, production-linked incentives for 14 champion sectors and other direct tax 
measures, the industrial growth started to recover. In the past few months, record vaccinations as 
well as improvement in consumer demand and business confidence have had a positive impact 
on the performance of the industrial sector. This period also saw a boost to digital infrastructure, 
structural reforms in telecommunications and big-ticket disinvestment in Air India. The pace of 
this recovery and further growth is likely to continue due to consistent efforts of the government 
to bring in various structural, fiscal and infrastructural reforms in addition to a slew of measures/
schemes like the production linked incentive scheme (PLI) to support industries .
8.2	 The	 gross	 value	 addition	 at	 constant	 prices	 (GV A)	 in	 the	 industrial	 sector	 grew	 at	 the	
compound	 annual	 growth	 rate	 (CAGR)	 of	 4.53	 percent	 between	 201 1-12	 and	 2019-20	 while	
total	 GV A 	 grew	 by	 CAGR	 of	 5.63	 percent	 over	 the	 same	 period.The	 share	 of	 the	 industrial	
sector	 in	 the	 nominal	 GV A(at	 current	 prices)	 was	 25.9	 percent	 in	 2020-21.W ith	 the	 industrial	
sector	 recovering	 and	 expec ted	 to	 grow	 at	 1 1.8	 percent,	 as	 per	 advance	 estimates	 for	 2021-22	 by	
National	Statistical	Office,	industry’ s	share	is	expected	to	increase	to	28.2	percent.	(Figure	1).
8.3	 Manufacturing,	 with	 an	 average	 share	 of	 16.3	 percent	 in	 nominal	 GV A 	 over	 the	 last	 decade,	
has	 a	 dominan t	 presence	 within	 the	 industrial	 sector .	 In	 2020-21,	 the	 share	 of	 manufacturing	 fell	
to	 14.4	 percent	 but	 is	 expected	 to	 improve	 to15.3	 percent	 in	 2021-22.	 The	 share	 of	 electricity	 has	
been	 showing	 an	 increasing 	 trend	 since	 2012-13	 and	 was	 2.7	 percent	 2020-21.	 Figures	 1	 and	 2	
show	 value	 added	 in	 the	 industrial	 sector	 and	 growth	 respectively .	 In	 2020-21,	 electricity ,	 gas,	
water supply and other utility services was the only sub sector that had experienced a positive 
growth	 of	 1.9	 percent	 (table	 1).	 In	 2021-22,	 the	 manufacturing	 sector	 is	 expected	 to	 grow	 by	
12.5	 percent,	 mining	 and	 quarrying	 by	 14.3	 percent,	 construction	 by	 10.7	 percent	 and	 electricity ,	
gas	 and	 water	 supply	 by	 8.5	 per	 cent.	 This	 improveme nt	 is	 on	 the	 back	 of	 industrial	 contraction	
in	the	corresponding	period	of	the	last	financial	year .	
Figure 1: Share of Industry and its components in Gross value added
 
 
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
3rd RE 2nd RE 1st RE PE 1st AE
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22
Share in GVA 
Mining & quarrying Manufacturing
Electricity, gas, water supply & other utility services Construction
Industry
Source: Survey calculations based on MoSPI data. Data at current prices.
267 Industry and Infrastructure
Table 1: Growth in Gross Value Added in Industry
Sectors
Year
2012-
13
2013-
14
2014-
15
2015-
16
2016-
17
2017-
18
2018-
19
2019-
20
2020-
21
2021-
22
3
rd
RE 2
nd
RE 1
st RE PE 1
st AE
Mining	&	quar-
rying
0.6 0.2 9.7 10.1 9.8 -5.6 0.3 -2.5 -8.5 14.3
Manufacturing 5.5 5.0 7.9 13.1 7.9 7.5 5.3 -2.4 -7.2 12.5
Electricity, gas, 
water supply 
& other utility 
services
2.7 4.2 7.2 4.7 10.0 10.6 8.0 2.1 1.9 8.5
Construction 0.3 2.7 4.3 3.6 5.9 5.2 6.3 1.0 -8.6 10.7
Industry 3.3 3.8 7.0 9.6 7.7
5.9 5.3 -1.2 -7.0 11.8
Source: Survey calculations based on MoSPI data.
Figure 2: Growth trends in Industry’s Value Addition and its components
 
 
-10.0
-5.0
0.0
5.0
10.0
15.0
2012-
13
2013-
14
2014-
15
2015-
16
2016-
17
2017-
18
2018-
19
Growth Y-o-Y in percent
-10.0
0.0
10.0
20.0
AE
2019-20 2020-21 2021-22
Source: Survey calculations based on MoSPI data.
Index of Industrial Production (IIP)
8.4 The impact of the pandemic on the industrial sector is reflected in the negative growth  of 
8.4	 percent	 in	 2020-21.	 In	 April-November	 2021-22	 the	 IIP 	 grew	 by	 17.4	 per	 cent	 as	 compared	
to	 (-15.3)	 per	 cent	 in	 the	 corresponding	 period	 of	 the	 previous	 year .	The supply side measures as 
also steps to bolster demand, taken to address the contraction, are responsible for the significantly 
improved	 performance	 of	 the	 industrial	 sector	 in	 2021-22.	 In	 November	 2021	 the	 IIP 	 index	 grew	
by	 1.4	 per	 cent	 with	 the	 mining	 sector	 recorded	 a	 growth	 of	 5.0	 percent	 followed	 by	 electricity	
at	 2.1	 percent 	 and	 manufac turing	 at	 0.9	 percent.	 	 In	 terms	 of	 use-based	 classification	 also,	 the	
Page 4


CHAPTER
08
Global Industrial activity continued to be affected by the disruptions caused by the 
COVID-19 pandemic. While the Indian industry was no exception to these disruptions 
,its performance has improved in 2021-22. Gradual unlocking of the economy, record 
vaccinations, improvement in consumer demand, continued policy support towards 
industries by the government in the form of AtmaNirbhar Bharat Abhiyan and further 
reinforcements in 2021-22 have led to an upturn in the performance of the industrial 
sector. The growth of the industrial sector, in the first half of 2021-22, was 22.9 percent 
vis a vis the corresponding period of 2020-21and is expected to grow by 11.8 percent 
in this financial year. The industrial performance has shown improvement as reflected 
in the cumulative growth of the IIP. During April-November 2021-22 the IIP grew at 
17.4 percent as compared to (-)15.3 percent in April-November 2020-21. According to 
RBI- Studies on Corporate Performance, which is based on the results of select listed 
companies in the private corporate sector, the net profit to sales ratio of large corporates 
reached an all-time high despite the pandemic. Buoyant FDI inflows amid improvements 
in overall business sentiments, foretells a positive outlook for the industry.
The introduction of the production linked incentive scheme (PLI) to encourage scaling up 
of industries and major boost provided to infrastructure-both physical as well as digital–
combined with continued measures to reduce transaction costs and improve ease of doing 
business, would support the pace of recovery. Several initiatives such as the National 
Infrastructure Pipeline (NIP), National Monetization Plan (NMP), amongst others, have 
been taken to propel the infrastructure investment. Capital expenditure for the Indian 
Railways has been substantially increased from an average annual of Rs. 45,980 crores 
during 2009-14 to Rs. 155,181 crores in 2020-21 and it has been budgeted to further increase 
to Rs. 215,058 crores in 2021-22. This implies five times increase in comparison to the 2014 
level. In addition, the extent of road construction per day increased substantially in 2020-21 
to 36.5 kms per day from 28 kms per day in 2019-20, a rise by 30.4 percent as compared 
to the previous year. The Government has also heralded a major boost to the electronics 
hardware sector and brought in structural and procedural reforms in the telecom sector .
Industry and Infrastructure
INTRODUCTION
8.1 COVID-19 pandemic led to disruptions in global economic activity impacting not only 
the lives but also livelihoods. The Indian industry experienced interlude in business activity 
leading to slowdown in its performance. With the gradual unlocking of the country coupled 
266 Economic Survey 2021-22 
with supportive policy initiatives which included easing of supply side bottlenecks through 
easier access to credit especially, emergency credit line guarantee scheme to MSMEs, relief to 
the real estate sector, production-linked incentives for 14 champion sectors and other direct tax 
measures, the industrial growth started to recover. In the past few months, record vaccinations as 
well as improvement in consumer demand and business confidence have had a positive impact 
on the performance of the industrial sector. This period also saw a boost to digital infrastructure, 
structural reforms in telecommunications and big-ticket disinvestment in Air India. The pace of 
this recovery and further growth is likely to continue due to consistent efforts of the government 
to bring in various structural, fiscal and infrastructural reforms in addition to a slew of measures/
schemes like the production linked incentive scheme (PLI) to support industries .
8.2	 The	 gross	 value	 addition	 at	 constant	 prices	 (GV A)	 in	 the	 industrial	 sector	 grew	 at	 the	
compound	 annual	 growth	 rate	 (CAGR)	 of	 4.53	 percent	 between	 201 1-12	 and	 2019-20	 while	
total	 GV A 	 grew	 by	 CAGR	 of	 5.63	 percent	 over	 the	 same	 period.The	 share	 of	 the	 industrial	
sector	 in	 the	 nominal	 GV A(at	 current	 prices)	 was	 25.9	 percent	 in	 2020-21.W ith	 the	 industrial	
sector	 recovering	 and	 expec ted	 to	 grow	 at	 1 1.8	 percent,	 as	 per	 advance	 estimates	 for	 2021-22	 by	
National	Statistical	Office,	industry’ s	share	is	expected	to	increase	to	28.2	percent.	(Figure	1).
8.3	 Manufacturing,	 with	 an	 average	 share	 of	 16.3	 percent	 in	 nominal	 GV A 	 over	 the	 last	 decade,	
has	 a	 dominan t	 presence	 within	 the	 industrial	 sector .	 In	 2020-21,	 the	 share	 of	 manufacturing	 fell	
to	 14.4	 percent	 but	 is	 expected	 to	 improve	 to15.3	 percent	 in	 2021-22.	 The	 share	 of	 electricity	 has	
been	 showing	 an	 increasing 	 trend	 since	 2012-13	 and	 was	 2.7	 percent	 2020-21.	 Figures	 1	 and	 2	
show	 value	 added	 in	 the	 industrial	 sector	 and	 growth	 respectively .	 In	 2020-21,	 electricity ,	 gas,	
water supply and other utility services was the only sub sector that had experienced a positive 
growth	 of	 1.9	 percent	 (table	 1).	 In	 2021-22,	 the	 manufacturing	 sector	 is	 expected	 to	 grow	 by	
12.5	 percent,	 mining	 and	 quarrying	 by	 14.3	 percent,	 construction	 by	 10.7	 percent	 and	 electricity ,	
gas	 and	 water	 supply	 by	 8.5	 per	 cent.	 This	 improveme nt	 is	 on	 the	 back	 of	 industrial	 contraction	
in	the	corresponding	period	of	the	last	financial	year .	
Figure 1: Share of Industry and its components in Gross value added
 
 
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
3rd RE 2nd RE 1st RE PE 1st AE
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22
Share in GVA 
Mining & quarrying Manufacturing
Electricity, gas, water supply & other utility services Construction
Industry
Source: Survey calculations based on MoSPI data. Data at current prices.
267 Industry and Infrastructure
Table 1: Growth in Gross Value Added in Industry
Sectors
Year
2012-
13
2013-
14
2014-
15
2015-
16
2016-
17
2017-
18
2018-
19
2019-
20
2020-
21
2021-
22
3
rd
RE 2
nd
RE 1
st RE PE 1
st AE
Mining	&	quar-
rying
0.6 0.2 9.7 10.1 9.8 -5.6 0.3 -2.5 -8.5 14.3
Manufacturing 5.5 5.0 7.9 13.1 7.9 7.5 5.3 -2.4 -7.2 12.5
Electricity, gas, 
water supply 
& other utility 
services
2.7 4.2 7.2 4.7 10.0 10.6 8.0 2.1 1.9 8.5
Construction 0.3 2.7 4.3 3.6 5.9 5.2 6.3 1.0 -8.6 10.7
Industry 3.3 3.8 7.0 9.6 7.7
5.9 5.3 -1.2 -7.0 11.8
Source: Survey calculations based on MoSPI data.
Figure 2: Growth trends in Industry’s Value Addition and its components
 
 
-10.0
-5.0
0.0
5.0
10.0
15.0
2012-
13
2013-
14
2014-
15
2015-
16
2016-
17
2017-
18
2018-
19
Growth Y-o-Y in percent
-10.0
0.0
10.0
20.0
AE
2019-20 2020-21 2021-22
Source: Survey calculations based on MoSPI data.
Index of Industrial Production (IIP)
8.4 The impact of the pandemic on the industrial sector is reflected in the negative growth  of 
8.4	 percent	 in	 2020-21.	 In	 April-November	 2021-22	 the	 IIP 	 grew	 by	 17.4	 per	 cent	 as	 compared	
to	 (-15.3)	 per	 cent	 in	 the	 corresponding	 period	 of	 the	 previous	 year .	The supply side measures as 
also steps to bolster demand, taken to address the contraction, are responsible for the significantly 
improved	 performance	 of	 the	 industrial	 sector	 in	 2021-22.	 In	 November	 2021	 the	 IIP 	 index	 grew	
by	 1.4	 per	 cent	 with	 the	 mining	 sector	 recorded	 a	 growth	 of	 5.0	 percent	 followed	 by	 electricity	
at	 2.1	 percent 	 and	 manufac turing	 at	 0.9	 percent.	 	 In	 terms	 of	 use-based	 classification	 also,	 the	
268 Economic Survey 2021-22 
index reflects broad-based recovery across all sectors (Table 2).	 Primary	 goods	 at	 3.5	 percent,	
infrastructure	 goods	 with	 3.8	 percent,	 consumer	 non-durables	 with	 0.8	 and	 intermediate	 goods	
at	2.5	percent	led	the	recovery	under	the	used	based	classification.
Figure 3: Value of Index of Industrial Production
 
0.00
20.00
40.00
60.00
80.00
100.00
120.00
140.00
160.00
Nov-19
Dec-19
Jan-20
Feb-20
Mar-20
Apr-20
May-20
Jun-20
Jul-20
Aug-20
Sep-20
Oct-20
Nov-20
Dec-20
Jan-21
Feb-21
Mar-21
Apr-21
May-21
Jun-21
Jul-21
Aug-21
Sep-21
Oct-21
Nov-21
Value of Index
Actual Seasonally Adjusted
Source: Survey calculations based on MOSPI data
Table 2: Sector wise IIP - Growth in percent
 Weight
Nov-
20
Dec-
20
Jan-
21
Feb-
21
Mar-
21
Apr-
21
May-
21
Jun-
21
Jul-
21
Aug-
21
Sep-
21
Oct-
21
Nov-
21
By Sector            
Mining 14.4 -5.4 -3 -2.4 -4.4 6.1 # 23.6 23.1 19.5 23.3 8.6 1 1.5 5
Manufacturing 77.6 -1.6 2.7 -0.9 -3.4 28.4 # 32.1 13.2 10.5 11.1 3 3.1 0.9
Electricity 8 3.5 5.1 5.5 0.1 22.5 # 7.5 8.3 11.1 16 0.9 3.1 2.1
General 100 -1.6 2.2 -0.6 -3.2 24.2 # 27.6 13.8 1 1.5 13 3.3 4 1.4
  
Primary goods 34 -1.8 0.4 0.7 -4.6 7.9 # 15.8 12 12.4 16.9 4.6 9 3.5
Capital goods 8.2 -7.5 2.2 -9 -4.2 50.4 # 74.9 27.3 30.3 20 2.4 -1.5 -3.7
Intermediate 
goods
17.2 -1.8 2.3 2 -5.3 22.4 # 54.2 22.6 14.6 11.8 5 3.8 2.5
Infrastructure/	
construction
12.3 2.1 3.1 2.3 -3.5 35.1 # 46.5 20 12.3 13.5 7.8 6.6 3.8
Consumer 
durables
12.8 -3.2 6.5 -0.1 6.6 59.9 # 80.4 28 19.4 11.1 -1.9 -3.6 -5.6
Consumer 
non-durables
15.3 -0.7 1.9 -5.4 -3.8 29.2 # 0.2 -3.9 -2.3 5.9 0.2 0.9 0.8
Red- 	 Negative 	 growth, 	 Y ellow- 	 Growth 	 rate 	 positive 	 but 	 less 	 than 	 5 	 per 	 cent, 	 Green- 	 Positive 	 and 	 more 	 than 	 5 	 per 	 cent 
Source:	 Survey	 calculations	based	 on	 MOSPI	 data.	#	 In	 view	 of	 the	 circumstances	mentioned	in	 the	 Press	 Release	
for	IIP 	dated	1 1th	June	2021,	the	indices	for	 April	2021	are	not	comparable	with	those	of	 April	2020	-	MOSPI
Page 5


CHAPTER
08
Global Industrial activity continued to be affected by the disruptions caused by the 
COVID-19 pandemic. While the Indian industry was no exception to these disruptions 
,its performance has improved in 2021-22. Gradual unlocking of the economy, record 
vaccinations, improvement in consumer demand, continued policy support towards 
industries by the government in the form of AtmaNirbhar Bharat Abhiyan and further 
reinforcements in 2021-22 have led to an upturn in the performance of the industrial 
sector. The growth of the industrial sector, in the first half of 2021-22, was 22.9 percent 
vis a vis the corresponding period of 2020-21and is expected to grow by 11.8 percent 
in this financial year. The industrial performance has shown improvement as reflected 
in the cumulative growth of the IIP. During April-November 2021-22 the IIP grew at 
17.4 percent as compared to (-)15.3 percent in April-November 2020-21. According to 
RBI- Studies on Corporate Performance, which is based on the results of select listed 
companies in the private corporate sector, the net profit to sales ratio of large corporates 
reached an all-time high despite the pandemic. Buoyant FDI inflows amid improvements 
in overall business sentiments, foretells a positive outlook for the industry.
The introduction of the production linked incentive scheme (PLI) to encourage scaling up 
of industries and major boost provided to infrastructure-both physical as well as digital–
combined with continued measures to reduce transaction costs and improve ease of doing 
business, would support the pace of recovery. Several initiatives such as the National 
Infrastructure Pipeline (NIP), National Monetization Plan (NMP), amongst others, have 
been taken to propel the infrastructure investment. Capital expenditure for the Indian 
Railways has been substantially increased from an average annual of Rs. 45,980 crores 
during 2009-14 to Rs. 155,181 crores in 2020-21 and it has been budgeted to further increase 
to Rs. 215,058 crores in 2021-22. This implies five times increase in comparison to the 2014 
level. In addition, the extent of road construction per day increased substantially in 2020-21 
to 36.5 kms per day from 28 kms per day in 2019-20, a rise by 30.4 percent as compared 
to the previous year. The Government has also heralded a major boost to the electronics 
hardware sector and brought in structural and procedural reforms in the telecom sector .
Industry and Infrastructure
INTRODUCTION
8.1 COVID-19 pandemic led to disruptions in global economic activity impacting not only 
the lives but also livelihoods. The Indian industry experienced interlude in business activity 
leading to slowdown in its performance. With the gradual unlocking of the country coupled 
266 Economic Survey 2021-22 
with supportive policy initiatives which included easing of supply side bottlenecks through 
easier access to credit especially, emergency credit line guarantee scheme to MSMEs, relief to 
the real estate sector, production-linked incentives for 14 champion sectors and other direct tax 
measures, the industrial growth started to recover. In the past few months, record vaccinations as 
well as improvement in consumer demand and business confidence have had a positive impact 
on the performance of the industrial sector. This period also saw a boost to digital infrastructure, 
structural reforms in telecommunications and big-ticket disinvestment in Air India. The pace of 
this recovery and further growth is likely to continue due to consistent efforts of the government 
to bring in various structural, fiscal and infrastructural reforms in addition to a slew of measures/
schemes like the production linked incentive scheme (PLI) to support industries .
8.2	 The	 gross	 value	 addition	 at	 constant	 prices	 (GV A)	 in	 the	 industrial	 sector	 grew	 at	 the	
compound	 annual	 growth	 rate	 (CAGR)	 of	 4.53	 percent	 between	 201 1-12	 and	 2019-20	 while	
total	 GV A 	 grew	 by	 CAGR	 of	 5.63	 percent	 over	 the	 same	 period.The	 share	 of	 the	 industrial	
sector	 in	 the	 nominal	 GV A(at	 current	 prices)	 was	 25.9	 percent	 in	 2020-21.W ith	 the	 industrial	
sector	 recovering	 and	 expec ted	 to	 grow	 at	 1 1.8	 percent,	 as	 per	 advance	 estimates	 for	 2021-22	 by	
National	Statistical	Office,	industry’ s	share	is	expected	to	increase	to	28.2	percent.	(Figure	1).
8.3	 Manufacturing,	 with	 an	 average	 share	 of	 16.3	 percent	 in	 nominal	 GV A 	 over	 the	 last	 decade,	
has	 a	 dominan t	 presence	 within	 the	 industrial	 sector .	 In	 2020-21,	 the	 share	 of	 manufacturing	 fell	
to	 14.4	 percent	 but	 is	 expected	 to	 improve	 to15.3	 percent	 in	 2021-22.	 The	 share	 of	 electricity	 has	
been	 showing	 an	 increasing 	 trend	 since	 2012-13	 and	 was	 2.7	 percent	 2020-21.	 Figures	 1	 and	 2	
show	 value	 added	 in	 the	 industrial	 sector	 and	 growth	 respectively .	 In	 2020-21,	 electricity ,	 gas,	
water supply and other utility services was the only sub sector that had experienced a positive 
growth	 of	 1.9	 percent	 (table	 1).	 In	 2021-22,	 the	 manufacturing	 sector	 is	 expected	 to	 grow	 by	
12.5	 percent,	 mining	 and	 quarrying	 by	 14.3	 percent,	 construction	 by	 10.7	 percent	 and	 electricity ,	
gas	 and	 water	 supply	 by	 8.5	 per	 cent.	 This	 improveme nt	 is	 on	 the	 back	 of	 industrial	 contraction	
in	the	corresponding	period	of	the	last	financial	year .	
Figure 1: Share of Industry and its components in Gross value added
 
 
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
3rd RE 2nd RE 1st RE PE 1st AE
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22
Share in GVA 
Mining & quarrying Manufacturing
Electricity, gas, water supply & other utility services Construction
Industry
Source: Survey calculations based on MoSPI data. Data at current prices.
267 Industry and Infrastructure
Table 1: Growth in Gross Value Added in Industry
Sectors
Year
2012-
13
2013-
14
2014-
15
2015-
16
2016-
17
2017-
18
2018-
19
2019-
20
2020-
21
2021-
22
3
rd
RE 2
nd
RE 1
st RE PE 1
st AE
Mining	&	quar-
rying
0.6 0.2 9.7 10.1 9.8 -5.6 0.3 -2.5 -8.5 14.3
Manufacturing 5.5 5.0 7.9 13.1 7.9 7.5 5.3 -2.4 -7.2 12.5
Electricity, gas, 
water supply 
& other utility 
services
2.7 4.2 7.2 4.7 10.0 10.6 8.0 2.1 1.9 8.5
Construction 0.3 2.7 4.3 3.6 5.9 5.2 6.3 1.0 -8.6 10.7
Industry 3.3 3.8 7.0 9.6 7.7
5.9 5.3 -1.2 -7.0 11.8
Source: Survey calculations based on MoSPI data.
Figure 2: Growth trends in Industry’s Value Addition and its components
 
 
-10.0
-5.0
0.0
5.0
10.0
15.0
2012-
13
2013-
14
2014-
15
2015-
16
2016-
17
2017-
18
2018-
19
Growth Y-o-Y in percent
-10.0
0.0
10.0
20.0
AE
2019-20 2020-21 2021-22
Source: Survey calculations based on MoSPI data.
Index of Industrial Production (IIP)
8.4 The impact of the pandemic on the industrial sector is reflected in the negative growth  of 
8.4	 percent	 in	 2020-21.	 In	 April-November	 2021-22	 the	 IIP 	 grew	 by	 17.4	 per	 cent	 as	 compared	
to	 (-15.3)	 per	 cent	 in	 the	 corresponding	 period	 of	 the	 previous	 year .	The supply side measures as 
also steps to bolster demand, taken to address the contraction, are responsible for the significantly 
improved	 performance	 of	 the	 industrial	 sector	 in	 2021-22.	 In	 November	 2021	 the	 IIP 	 index	 grew	
by	 1.4	 per	 cent	 with	 the	 mining	 sector	 recorded	 a	 growth	 of	 5.0	 percent	 followed	 by	 electricity	
at	 2.1	 percent 	 and	 manufac turing	 at	 0.9	 percent.	 	 In	 terms	 of	 use-based	 classification	 also,	 the	
268 Economic Survey 2021-22 
index reflects broad-based recovery across all sectors (Table 2).	 Primary	 goods	 at	 3.5	 percent,	
infrastructure	 goods	 with	 3.8	 percent,	 consumer	 non-durables	 with	 0.8	 and	 intermediate	 goods	
at	2.5	percent	led	the	recovery	under	the	used	based	classification.
Figure 3: Value of Index of Industrial Production
 
0.00
20.00
40.00
60.00
80.00
100.00
120.00
140.00
160.00
Nov-19
Dec-19
Jan-20
Feb-20
Mar-20
Apr-20
May-20
Jun-20
Jul-20
Aug-20
Sep-20
Oct-20
Nov-20
Dec-20
Jan-21
Feb-21
Mar-21
Apr-21
May-21
Jun-21
Jul-21
Aug-21
Sep-21
Oct-21
Nov-21
Value of Index
Actual Seasonally Adjusted
Source: Survey calculations based on MOSPI data
Table 2: Sector wise IIP - Growth in percent
 Weight
Nov-
20
Dec-
20
Jan-
21
Feb-
21
Mar-
21
Apr-
21
May-
21
Jun-
21
Jul-
21
Aug-
21
Sep-
21
Oct-
21
Nov-
21
By Sector            
Mining 14.4 -5.4 -3 -2.4 -4.4 6.1 # 23.6 23.1 19.5 23.3 8.6 1 1.5 5
Manufacturing 77.6 -1.6 2.7 -0.9 -3.4 28.4 # 32.1 13.2 10.5 11.1 3 3.1 0.9
Electricity 8 3.5 5.1 5.5 0.1 22.5 # 7.5 8.3 11.1 16 0.9 3.1 2.1
General 100 -1.6 2.2 -0.6 -3.2 24.2 # 27.6 13.8 1 1.5 13 3.3 4 1.4
  
Primary goods 34 -1.8 0.4 0.7 -4.6 7.9 # 15.8 12 12.4 16.9 4.6 9 3.5
Capital goods 8.2 -7.5 2.2 -9 -4.2 50.4 # 74.9 27.3 30.3 20 2.4 -1.5 -3.7
Intermediate 
goods
17.2 -1.8 2.3 2 -5.3 22.4 # 54.2 22.6 14.6 11.8 5 3.8 2.5
Infrastructure/	
construction
12.3 2.1 3.1 2.3 -3.5 35.1 # 46.5 20 12.3 13.5 7.8 6.6 3.8
Consumer 
durables
12.8 -3.2 6.5 -0.1 6.6 59.9 # 80.4 28 19.4 11.1 -1.9 -3.6 -5.6
Consumer 
non-durables
15.3 -0.7 1.9 -5.4 -3.8 29.2 # 0.2 -3.9 -2.3 5.9 0.2 0.9 0.8
Red- 	 Negative 	 growth, 	 Y ellow- 	 Growth 	 rate 	 positive 	 but 	 less 	 than 	 5 	 per 	 cent, 	 Green- 	 Positive 	 and 	 more 	 than 	 5 	 per 	 cent 
Source:	 Survey	 calculations	based	 on	 MOSPI	 data.	#	 In	 view	 of	 the	 circumstances	mentioned	in	 the	 Press	 Release	
for	IIP 	dated	1 1th	June	2021,	the	indices	for	 April	2021	are	not	comparable	with	those	of	 April	2020	-	MOSPI
269 Industry and Infrastructure
Figure 4: Indices for Broad Sectors in IIP
 
0.00
20.00
40.00
60.00
80.00
100.00
120.00
140.00
160.00
180.00
Nov-19
Dec-19
Jan-20
Feb-20
Mar-20
Apr-20
May-20
Jun-20
Jul-20
Aug-20
Sep-20
Oct-20
Nov-20
Dec-20
Jan-21
Feb-21
Mar-21
Apr-21
May-21
Jun-21
Jul-21
Aug-21
Sep-21
Oct-21
Nov-21
Value of Index
Manufacturing Capital goods Consumer non-durables
Source: Survey calculations based on MOSPI data
8.5	 The	 IIP 	 also	 provides	 data	 for	 23	 subgroups	 of	 the	 manufacturing	 sector .	 In	 the	 period,	
April-November	 2021-22,	 all	 the	 23	 sectors	 recorded	 a	 positive	 growth.	 The	 major	 industrial	
groups	 like	 textiles,	 wearing	 apparel,	 electrical	 equipment,	 motor	 vehicles	 staged	 a	 strong	
recovery	 (Figure5).	 Improvement	 in	 the	 performance	 of	 the	 textiles	 and	 wearing	 apparel	 which	
is a labour-intensive industry has significant implications for employment creation.
Figure 5: Contributions of product groups to manufacturing growth - percent
Source: Survey calculations based on MOSPI data
Table 3: Growth in Manufacturing sectors in percent
Group Weights
Nov-
20
Dec-
20
Jan-
21
Feb-
21
Mar-
21
Apr-
21
May-
21
Jun-
21
Jul-
21
Aug-
21
Sep-
21
Oct-
21
Nov-
21
Food	Products 5.3 7.6 -1.7 -1.8 -0.3 17.1 # 13.7 8.4 4.7 9.5 0.5 4.8 -1.3
Beverages 1.0 -15.3 -7.7 -7.6 -12.9 26.5 # -0.2 -2.3 14.3 12.4 2 5.6 0.8