Improvement in industrial production – Improvement in Industrial Production

The growth rate of industrial production reached 3 percent with a slight improvement in March, compared to the 6 -month low of 2.72 percent in February. The expansion in production was curbed due to high base and weak demand. This has been revealed from the data released by the Ministry of Statistics on Monday.

In March 2024, the IIP growth rate was 5.4 percent. The slight improvement in the industrial production index (IIP) data in March has occurred due to a rise in the power sector (6.3 percent) and a slight expansion in the manufacturing sector (3 percent). However, the increase in the mining sector (0.4 percent) covered the total overall.

If you look at the classification based on use, the growth rate of infrastructure items (8.8 percent), durable consumer goods (6.6 percent) has been faster. On the other hand, the speed of production of capital goods (2.4 percent) has decreased. Production of primary items (3.1 percent) and intermediate goods (2.3 percent) has increased slightly. At the same time, consumer non-sustainable (-4.7 percent) declined and remained in the field of decline for the fourth consecutive month.

Rajni Sinha, the chief economist of the care ratings, said that the manufacturing sector in March must have benefited due to the raising stores by the companies before the anticipated announcement of counter -duty. However, keeping an eye on consumption in view of inequality in the scenario of domestic demand, it remains important.

He said, ‘Rural demand is indicating recovery. At the same time, there is concern with lethargy in urban demand. There is a possibility of supporting the demand for consumption later due to decrease in inflation, improvement of agricultural activities, low cost of debt and reduced income tax burden.
Overall, the IIP growth in FY 2025 has come down to 4 -year low to 4 percent. This shows dull industrial demand during the year. In comparison, the IIP growth rate in FY 2024 was 5.9 percent. Earlier in FY 2021, IIP was compressed 8.4 percent during the Kovid epidemic.

Chief economist Madan Sabanvis in Bank of Baroda said that this year industrial growth has been more dull and consumption has been contributed to a major contribution. Statistics show that consumer non-tricky sector has compressed 1.6 percent in FY 2025. At the same time, the growth rate of infrastructure (6.6 percent), mediated items (4.1 percent), capital items (5.5 percent) and primary items (3.9 percent) have become dull during the month.

However, the consumer goods sector has done better and its growth rate has been 7.9 percent during the year. This growth has been mainly operated with electronics, computers etc. From April 2025, IIP figures will now be released on 28th every month. In this way, the interval from the reference month of the figure will be reduced from 42 days to 28 days and the need for second amendment of IIPs will also be over.

Chief Economist Aditi Nair said that the response rate was low due to delay in release of data. This has weakened the estimated growth rate of March. Because of this, a big amendment in the data can be revealed compared to the first.

First Published – April 28, 2025 | 10:36 pm IST

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