India's Index of Industrial Production growth slows to 4.9% as mining sector sees decline
New Delhi:With the poor performance, mostly in the mining sector, India’s industrial output slowed marginally to 4.9 per cent in March this year as compared to the previous month. However, the previous high of IIP was recorded at 11.9 per cent in October 2023, which slowed to 2.5 per cent in November, 4.2 per cent in December and 4.1 per cent in January 2024, the government data showed on Friday.
The factory output measured in terms of the index of industrial production or IIP was 5.6 per cent in February 2024, while it saw a growth of 1.9 per cent in March 2023. The IIP grew 5.8 per cent during fiscal year 2023-24, compared to a 5.2 per cent expansion in the preceding fiscal.
As per the National Statistical Office (NSO) data, India’s index of industrial production grew by 4.9 per cent in March 2024, while the growth rates of the three sectors — mining, manufacturing and electricity for the month of March 2024 over March 2023 are 1.2 per cent, 5.2 per cent and 8.6 per cent respectively.
The latest data, however, showed that the mining output growth decelerated to 1.2 per cent in March against a 6.8 per cent expansion in the year-ago month. “The manufacturing sector's growth accelerated to 5.2 per cent in March compared to 1.5 per cent a year ago. The power generation increased by 8.6 per cent in March against a contraction of 1.6 per cent in the same month of the last year,” the data showed.
"Within the manufacturing sector, the growth rate of the top three positive contributors to the growth of IIP for the month of March 2024 are – manufacture of basic metals (7.7 per cent), manufacture of pharmaceuticals, medicinal chemical and botanical products (16.7 per cent), and “manufacture of other transport equipment (25.4 per cent),” the NSO data showed.
Industrial output, as classified by the end use of goods, also showed that primary goods output rose 2.5 per cent, while capital goods output increased 6.1 per cent. “Similarly, intermediate goods output rose 5.1 per cent and infrastructure and construction goods output gained 6.9 per cent. Besides, consumer durables output rose 9.5 per cent and consumer non-durable output fell 4.9 per cent,” the data showed.
However, economists and analysts feel that the IIP growth showed that the leap-year effect has faded. “The IIP growth was led by a robust expansion in electricity, with demand boosted by rising temperatures, and dampened by a feeble rise in mining output. Encouragingly, manufacturing growth rose to a five-month high, albeit on a very low base,” said Aditi Nayar, chief economist, head research and outreach, ICRA Ltd.
