If and only if we are able to contain the disruption in May will we be able to see a sustainable industrial growth ahead. But that does not seem likely. With Covid having crept into rural India, we are sure to see more pain than the growth numbers like March. If the lockdown situation continues, which seems to be likely with ICMR saying that affected states need to look at 6-8 weeks more of lockdown, going ahead, lower IIP and higher inflation in the range of 5% seems inevitable.

For now, thanks to the low base effect, IIP for March came in at 22.4% v/s (-)3.4% in Feb. Also, IIP contracted 8.6% in FY21 v/s contraction of 0.8% (YoY). The rise in IIP is only on the back of the 25.8% growth clocked in by the manufacturing sector, once again this is on an extremely low base – in March 2020, it had contracted 22.8%. MoM, it was at (-)3.7% in Feb.

And CPI inflation for April too was a big surprise, coming in at 4.29% v/s 5.52% in March. This was mainly on account of the drop in food inflation, which was at 2.02% in April v/s 4.87% in March. For the fifth straight time, CPI has come in below the RBI’s upper margin of 6%.

At least as of now, if RBI decides to give these numbers some credence, then it is like a temporary relief. But the policymakers know for sure that these numbers are just a flash-in-the-pan as inflation will also creep up and growth will also be impacted due to the lockdowns and curfews imposed in various states. Supplies are bound to get impacted; those in cities are already seeing some crunch in getting essentials.

These numbers per se, will have no impact on the markets when they open on Friday as currently, they seem like numbers which are way behind, seeming much irrelevant. The current situation is much different and remains dynamic from what these numbers today stand for.

There was a time when IIP meant something; thanks to the pandemic, all these numbers, are just that – mere numbers.