In March 2024, India’s Index of Industrial Production (IIP) showed a growth rate of 4.9%. This marginal slowdown is linked to the country’s struggling mining industry. March 2023 observed a rise of 1.9%. The rate was surprising considering the 5.6% growth in February 2024.
Breakdown of Performance of different sectors
The mining industry had a sharp slowdown in growth, with March 2024 growth falling to 1.2% from 6.8% in the same month of the previous year. As for the manufacturing sector, it proved resilient, growing at a faster rate of 5.2% in March 2023 as opposed to 1.5% in the previous year. After declining by 1.6% in March of the previous year, the production of electricity increased by 8.6%.
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Factors Affecting Manufacturing Growth Rate
The important driving sectors were – medicine, transport equipment and basic metals. These three sectors grew by 16.7%, 25.4%, and 7.7%. In March 2024, these sectors made a substantial contribution to the growth in industrial production as a whole.
Using the classification based on end use, the production of primary products, capital goods, intermediate and finally infrastructure and construction goods rose by 2.5%, 6.1%, 5.1%, and 6.9% respectively. Nonetheless, the output of consumer non-durable items decreased by 4.9%. The output of consumer durables increased by 9.5%.
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Analysis and Outlook
The decline in industrial output growth is a reflection of the declining impact of earlier favorable circumstances. The decline has been attributed particularly to the leap-year effect. Although sectoral results differ, India’s industrial environment is resilient despite difficulties in the mining industry, as seen by the growth in manufacturing and energy generation.
About Author
This article is written by Manasi Gawali, who is an Economics graduate from St. Xavier’s College, Mumbai. She is passionate about economics and finance. She enjoys research, writing poems, music, and travel.
