March Sees 4.9% Growth in India's Industrial Production

In March of this year, India's Index of Industrial Production (IIP) recorded a growth of 4.9 percent compared to the same month in the previous year, according to data released by the Ministry of Statistics on Friday.

The manufacturing sector, a key provider of employment opportunities for recent graduates from the country's universities and engineering institutes, experienced a growth rate of 5.2 percent during the month.

At 8.6 percent, electricity generation was significantly higher, but the mining sector inched up by only 1.2 percent.

The top contributors among the manufacturing sub-sectors to the IIP were "Manufacture of basic metals" with an increase of 7.7 percent, "Manufacture of pharmaceuticals, medicinal chemical and botanical products" with an increase of 16.7 percent, and "Manufacture of other transport equipment" with an increase of 25.4 percent.

On the basis of use-based classification, the production of capital goods, an indicator of investments in the economy, increased 6.1 percent in March, portending a positive outlook for economic growth.

Consumer durables output, including goods like refrigerators, washing machines, and TVs, surged sharply by 9.5 percent in the month as consumers increased spending on these goods on improving incomes and employment opportunities.

The cumulative growth rate of industry for the April-March 2023-24 period over the previous year has been 5.8 percent.

Sector-wise, the cumulative growth rate is 7.5 percent in mining, 5.5 percent in manufacturing, and 7.1 percent in electricity during the same period.

Reacting to the data, ICRA Chief Economist Aditi Nayar said growth in IIP was driven mainly by a strong expansion in electricity generation—due to rising temperatures—and the mining output saw only marginal growth.

She said the trend of manufacturing growth reaching a five-month high was also encouraging.