Electricity use reveals industrial activity in real time

Its strong link with factory output across states and sectors makes it a proxy tracker

- ASHISH KUMAR & PAYAL SETH

As India has embarked on a quest to become a global manufacturing powerhouse, with ambitious targets such as raising the share of manufacturing in gross domestic product (GDP) from about 17% currently to 25% by 2030 and creating 100 million jobs, tracking progress both accurately and in real-time is critical. Yet, policymakers and analysts typically rely on lagging indicators. The Index of Industrial Production (IIP) has a lag of 42 days, which is being lowered to 28 days; quarterly GDP is reported with a two-month delay; and the Annual Survey of Industries (ASI) is released about two years after the relevant financial year. The real-time pulse of our industrial economy, however, lies not in delayed data and indices, but in the silent electric current flowing through our wires, which is updated every second, everywhere.

Electricity consumption is one of the most immediate, granular and underused indicators of industrial output. It powers not just lighting and ventilation, but also looms, furnaces, extruders, assembly lines and cold storage facilities. Where there is manufacturing activity, there is electricity demand, and changes in it offer powerful insights into the industrial sector's health.