There has been semi-serious and semi-funny news-stories on how the sale of antacids and digestive enzymes including PPI drugs (part of the five digit product code: 21002) had contributed to industrial production growth in India in November. The official press release of IIP for November 2017 is here.
For example, in November, the Index of Industrial Production (IIP) rose 8.4% y/y. Nearly 2% of was contributed by goods in the five digit categories 21001 to 21009. They have a combined weight of just under 5% in the IIP. In other words, nearly 25% of IIP growth in November came through the sale of products encompassing the five digit product codes 21001 to 21009. Interested readers can check out the document put out in March 2017 for the goods that are part of the five digit codes 21001 to 21009, when the revised IIP with a new base year was introduced. But, the story of antacids and digestive enzymes is more interesting.
Digestive enzymes and antacids (incl. PPI drugs) are part of these products with a weight of 0.22% only. Yet, it has been punching way above its weight in recent months. ‘PPI’ stands for Proton-Pump Inhibitors.
If one went to the website of the Ministry of Statistics and Project Implementation and click on the link to IIP, one can download the last eight monthly press releases of the IIP from April 2017 to November 2017.
In the last eight months, this category has figured every month among the highest contributors to industrial production growth. Here is the table:
The figures in the second, third and fourth columns are taken from the monthly press releases of IIP. The fifth column is column (3)/column (4).
Well, demonetisation, introduction of GST, the Insolvency and Bankruptcy code, Real Estate Regulation Act, Benami Transactions Act, Introduction of Aadhaar and the insistence on linking Aadhaar to everything else and the rumours spread by mischief makers that the government was angling for depositors’ money in bank accounts could have all contributed to a lot of indigestion and hence the rise in the sale of antacids and digestive enzymes!
Or, it could be that political leaders – that of BJP included – might be suffering from a lot of indigestion because of frequent elections and the anxieties they generate.
Jokes apart, the overall two digit category, ’21’, stands for pharmaceutical products, medicinal chemicals and medicinal shampoos, etc. Its weight is 5% in the IIP.
In general the annual growth in production of ’21’ – Manufacture of pharmaceuticals, medicinal chemical and botanical products – has picked up since the NDA came to office. It is not as if this big surge in production in pharmaceutical products is to meet exports. Export growth in the category, ‘Chemicals and Related Products’ was 3.0%, 1.4% and 2.4% for the fiscal years 2014-15, 2015-16 and 2016-17.
So, the bulk of the production of medicines is for internal consumption. That is bad news, in a way. Indians need to pay attention to preventive health – hygiene, sanitation, eating out, eating late, eating fat and rich food, sweets, eating unhealthy food, kept in the open, near open drains with swarming flies, etc. The multiplier benefits of good health for the economy will be tremendous. Even if the product category ’21’ does not contribute to growth in IIP because of that, it will show up in other categories of IIP.
The government too, on its part, should become mindful of the almost unceasing stream of uncertainties and stress it can cause with its excessive zeal on tax revenue mobilisation, on change of rules and regulations midstream (solar industry is a case in point), etc. All these cause stress, indigestion and hence the rise in the sale of antacids and digestive enzymes!
Good health is linked to good governance, stable regulatory environment and ease of doing business.