Parul
India’s industrial growth, based on the Index of Industrial Production (IIP), was recorded at 3.2 per cent in December 2024, according to the data released by the Ministry of Statistics on Wednesday.
The manufacturing sector, which accounts for more than three-fourths of the index of industrial production (IIP), posted a 3 per cent growth during December 2024.
The sector plays a key role in providing quality jobs to the young graduates passing out from the country’s engineering institutes and universities.
Within the manufacturing sector, 16 out of 23 industry groups at NIC 2 digit-level have recorded a positive growth in December 2024 over December 2023.
The top three positive contributors for the month of December 2024 are – “Manufacture of basic metals” (6.7 per cent), “Manufacture of electrical equipment” (40.1 per cent) and “Manufacture of coke and refined petroleum products” (3.9 per cent), the official statement said.
In the industry group “Manufacture of basic metals”, item groups “MS blooms/ billets/ ingots/ pencil ingots”, “Galvanised products of Steel (including colour coated tin plates, TMBP and Tin free steel)”, “Pipes and tubes of Steel”, have shown significant contribution in growth, according to the official statement.
The electricity sector clocked a robust growth of 6.2 per cent during the month while the mining sector slowed to 2.6 per cent.
The industrial growth rate in December has slowed after accelerating to a 6-month high of 5.2 per cent in November.
The figures on use-based classification show that the production of capital goods, which comprise machines used in factories, went up by a robust 10.3 per cent in December.
This segment reflects the real investment taking place in the economy which has a multiplier effect on the creation of jobs and incomes going ahead.
There was also an 8.3 per cent increase in the production of consumer durables such as electronic goods, refrigerators, and TVs during November 2024 reflecting the higher consumer demand for these items amid rising incomes.
The figures also show that industrial production increased by 4 per cent in the April-December 2024-25, compared to 6.3 per cent in the same period of the previous financial year.
Commenting on the update, Suman Chowdhury, Executive Director & Chief Economist, Acuité Ratings & Research says, “India’s IIP data for Dec’2025 disappointed with output growth slipping to 3.2 per cent YoY from a 5.0 per cent YoY (revised) in the previous month. This casts a doubt on a material recovery of industrial activity in the second half of the current fiscal. The sectoral breakdown of IIP presents a mixed picture. Electricity output remained healthy, with a 6.2 per cent YoY growth, signalling strong power demand. However, this was more than offset by weaker manufacturing growth, which moderated to 3.0 per cent; mining growth also softened to 2.6 per cent YoY,”
According to him, in user-based categories, Capital goods output grew 10.3 per cent YoY from 8.8 per cent YoY in November, reflecting a gradual rise of investments. Infrastructure and construction goods (6.3 per cent but weaker than 8.1 per cent in November) also remained relatively strong, aligning with ongoing public infrastructure spending. However, the 7.6 per cent contraction in consumer non-durables outlines the continued weakness in household demand and consumption.
“We expect IIP growth to pick up in Q4FY25 on the back of improving consumer demand, supported by the wedding season and the Kharif harvest. Adding on to it, the increased government spending, particularly on capital expenditure, is likely to accelerate in the coming months. Nevertheless, overall IIP growth for FY25 may not exceed 4.5 per cent, reflecting the slowdown in the domestic economy and the challenging external environment.” he added further.
