Winning Bizness Desk

Mumbai. India’s industrial growth slowed to 4% in the financial year 2024-25, down from 5.9% recorded in the previous fiscal. This marks a decline of around 1.9% on an annual basis. The industrial growth for March fell to 3%, primarily due to weak performance in the mining sector. In February, industrial growth had touched 2.9%, which was already the lowest in six months.

Sector-Wise Industrial Performance in March

A closer look at sector-specific growth reveals mixed trends. Manufacturing, which contributes more than three-fourths to the Index of Industrial Production (IIP), grew by 3% in March compared to 5.9% in the same month last year. The mining sector showed a marginal growth of 0.4% in March, down from 1.3% a year earlier. The electricity sector, however, performed better with a 6.3% growth in March, although this too was lower than last year's 8.6% growth.

Comparison Between February and March Growth

Sector-wise comparisons show notable shifts between February and March. Manufacturing rose slightly from 2.9% to 3%. Mining output, however, fell sharply from 1.6% to 0.4%. Electricity generation improved from 3.6% to 6.3%. Infrastructure goods and consumer durable goods saw noticeable upticks, while capital goods and consumer non-durable goods registered declines.

What is the Index of Industrial Production (IIP)?

The IIP measures the output of industrial sectors, covering manufacturing, mining, and utilities. Manufacturing includes products like vehicles, textiles, and cement. Mining covers resources like coal and minerals. Utilities involve public goods like roads, dams, and electricity. The IIP uses 2011-12 as the base year to measure growth or contraction. The manufacturing sector alone accounts for 77.63% of the total IIP weightage.

Core Industries and Their Influence

The performance of eight core industries—electricity, steel, refinery products, crude oil, coal, cement, natural gas, and fertilizers—heavily impacts the IIP numbers. Any fluctuations in these sectors directly reflect on the overall industrial production data. With sectors like mining and manufacturing underperforming, the overall IIP growth remained muted for March.

Key Takeaways:

- India's industrial growth declined to 4% in FY25 from 5.9% in FY24.

- March industrial growth slipped to 3%, down from 5.9% a year earlier.

- Manufacturing sector growth moderated to 3% in March.

- Mining sector showed minimal growth at 0.4% in March.

- Electricity sector growth improved to 6.3% in March.

- Infrastructure goods and consumer durables performed better in March.

- Capital goods and consumer non-durables witnessed declines during the same period.