Interrupted growth, Pg 8.

Key Highlights:

• IIP growth fell to 1.5% in June, driven by a contraction in mining (-8.7%) and electricity (-2.6%).
• Excessive rainfall in Jharkhand, Odisha, and West Bengal disrupted mining belts through waterlogging.
• Jharkhand saw 504.8 mm rainfall vs. a normal of 307 mm between June 1–July 12, but five districts remained rain-deficient.
• Damage to power infrastructure and supply chains further slowed industrial recovery.
• Mining and electricity together hold 22.3% weightage in the IIP index.
• Growth in capital (3.5%), intermediate (5.5%), and infrastructure goods (7.2%) suggests push from public infrastructure spending.
• Indian economic reporting seldom attributes such industrial slowdowns to climate-related causes.

Detailed Insights:

• Sectoral Impact of Monsoon Volatility:
  • The uneven southwest monsoon caused regional flooding and disruptions, especially in resource extraction and power generation, directly affecting industrial output.
• Institutional Gaps in Climate Attribution:
  • Indian agencies like MoSPI and RBI typically cite generic factors (input costs, demand, base effect) while avoiding climate attribution in macroeconomic data.
  • By contrast, institutions like the European Central Bank and Bank of England have begun incorporating climate risk frameworks into economic assessments.
• Need for Climate-Aware Reporting:
  • The failure to integrate climate risks into production data (like IIP or GDP) limits preparedness for climate-induced economic shocks.
  • RBI’s Financial Stability Reports have started including climate risk, but broader macroeconomic data still lack such integration.
• Policy Implication:
  • Ignoring climate dimensions in official economic reporting may undermine resilience planning and distort understanding of structural vulnerabilities.

Concepts Involved:

• Index of Industrial Production (IIP): A composite indicator measuring the volume of production across mining, manufacturing, and electricity sectors.
• Climate Attribution: The scientific process of evaluating the extent to which climate change influences specific weather events or trends.
• Southwest Monsoon: A seasonal wind pattern that delivers the majority of India’s rainfall between June and September.