An analysis on the indian economy: Key sectors — as published in the handbook of statistics on the Indian Economy 2021–22

The RBI periodically publishes data on the indian economy which I have found as useful repository for data analysis. I love analyzing data — they give me some helpful perspectives on the world in general. Give me any data and I will happily play with it for a couple of hours :). For this post I used one of the datasets published in the “Handbook of statistics on Indian Economy 2021–22” which was published on September 15, 2022.

There are a host of tables and analyses available across a broad range of topics. I picked one table — Table 32 : Annual Production Indices of Select Items (Base : 2011–12 = 100). I use R studio and R for analyzing data, mostly from the “tidyverse” package.

The data provides the annual production indices of around 81 industries. The base of the index is 2011–12. These 81 industries have been classified into 5 major categories of industries.
- Primary Goods
- Capital Goods
- Intermediate Goods
- Infrastructure/ Construction Goods
- Consumer Goods
The data is available for six years — 2016–17 to 2021–22.

The table also has the following notes as a background which is important for context, before concluding from the data
1. Data for 2021–22 are Provisional.
2. Production indices are based on the information received from the source agencies and may not be the total production in the country of the respective items.
I also do not know if these 81 industries listed here form a comprehensive set of industry groups.

With those notes of caution, here is the summary of my analysis in plots, which I hope are self explanatory.

1. Consumer Goods Industries: Movement in indices between 2016–17 and 2021–22
- Sugar, Digestive Enzymes and Anti-inflamatory API seem to be industries which have shown the highest amount of growth in these six years
- Vanaspati, Gold Jewellery and TV Sets are industries which showed a negative movement in their production indices.

2. Primary Goods Industries: Movement in indices between 2016–17 and 2021–22
- Kerosene, as an industry seems to be in a lot of trouble. A negative 68% with a strong downward trend
- Electricity as an industry seems to be the best perfroming in the primary goods category

3. Capital Goods Industries: Movement in indices between 2016–17 and 2021–22
- Ship Building and Agricultural tractors seem to be the best performing
- Printing machinery has also declined, almost as much as Kerosene

4. Intermediate Goods Industries: Movement in indices between 2016–17 and 2021–22
- MS Slabs (Had to google this one and stands for Mild Steel Slabs — ones that are used for varied purposes from consutruction to building boilers) seems to have had a rocking six years with more than a 200% movement in its index from 172 in 2016–17 to 531 in 2021–22
- Polythene and newsprint are some of the lowest performing ones in this segment

5. Infra and Construction Goods Industries: Movement in indices between 2016–17 and 2021–22
I do not understand this one as such. HR coils is the best performing industry in this segment while CR coils is the worst performing.

A quick reading on the internet about differences between these is noted as below:
Hot rolling is a mill process which involves rolling the steel at a high temperature (typically at a temperature over 1700° F), which is above the steel’s recrystallization temperature. When steel is above the recrystallization temperature, it can be shaped and formed easily, and the steel can be made in much larger sizes. HR steel is typically cheaper than cold rolled steel due to the fact that it is often manufactured without any delays in the process, and therefore the reheating of the steel is not required (as it is with cold rolled). CR steel is essentially HR steel that has had further processing. The steel is processed further in cold reduction mills, where the material is cooled (at room temperature) followed by annealing and/or tempers rolling.

It further goes on to say:

All cold products provide a superior surface finish, and are superior in tolerance, concentricity, and straightness when compared to HR

(Source: https://believeindustry.company/the-difference-of-hr-steel-and-cr-steel/)

With this reading I can surmise that the more expensive process is degrowing? Are more people opting for the more cheaper HR coils? Possibly need to check with an expert.

6. The best performing industries (Top 10) in the last six years 2016–17 to 2021–22 — those that have seen the highest swing in their indices.

When seen across industries some of the patterns become more evident. Here are the top 10 industries.

7. The worst performing industries (Bottom 10) in the last six years 2016–17 to 2021–22 — those that have seen the highest swing in their indices (Negatively).

8. How are industries correlated with each other? A note of caution here that this may not be a indicative of any robust correlation — much because this correlation analysis is made across data for just 6 years. One would need may more observations than just 6 to conclude on this. Nevertheless, I chose to see 30 of the top/bottom correlations given that there are 81 industries.

So based on this analysis, some of the highly positively correlated industries are:
- Steel frameworks and Newsprint (0.99)
- Copper bars and pig iron (0.99)
- Pipes and MS slabs (0.99)

Some of the negatively coorelated industries are:
- Fans and industrial valves (-0.99)
- Polymers and copper bars (-0.99)
- Polymers and pig iron (-0.98)

9. Lastly, I look at industries that have shown the most significant movement in the last 1 year.
This now analyzes the movements in the last one year and looks at the top 10 significant movements, either postive or negative. Interestingly, this reveals the following:
- Digestive enzymes and antacids — which was the best performing industry when looked at from a six year perspective, shows a degrowth
- textile machinery and small transformers have also seen a significant jump
- CR Coils, polythene films and Vanspati fall among the bottom performing industries in the last year

That’s all the insights I could gather from this dataset. I hope you enjoyed reading this. I had as much fun understanding how different industries fared over time!