The Indian economy continues its steady recovery as the Index of Industrial Production (IIP) for June 2024 reflects a year-on-year growth of 4.2%, according to the Quick Estimates released by the Ministry of Statistics and Programme Implementation (MoSPI). The IIP, which serves as a barometer of the country’s industrial activity, stood at 150.0 in June 2024, up from 143.9 in the same month last year. This modest increase highlights the resilience of the industrial sector despite ongoing global economic challenges.
The IIP is a critical economic indicator, and its June 2024 figures showcase the performance of key sectors. The indices for Mining, Manufacturing, and Electricity—the three main pillars of industrial production—were 134.9, 145.3, and 222.8 respectively. The growth rates for these sectors were notable, with Mining leading the way at 10.3%, followed by Electricity at 8.6%, and Manufacturing at 2.6%. These figures underline the significant contributions of these sectors to the overall industrial growth.
Sectoral Performance
In the Manufacturing sector, which is crucial for India’s industrial output, certain subsectors stood out for their impressive growth. “Manufacture of basic metals” saw a growth rate of 4.9%, while “Manufacture of electrical equipment” surged by a remarkable 28.4%. The “Manufacture of motor vehicles, trailers, and semi-trailers” also posted a healthy growth rate of 4.1%. These subsectors were the top positive contributors to the overall growth in the Manufacturing sector, signaling strong demand and production in these areas.
Use-Based Classification
When analyzed based on use-based classification, the IIP data for June 2024 presents a varied picture. The indices for Primary Goods, Capital Goods, Intermediate Goods, and Infrastructure/Construction Goods stood at 156.0, 110.0, 159.0, and 178.4 respectively. The growth rates in these categories were 6.3% for Primary Goods, 2.4% for Capital Goods, 3.1% for Intermediate Goods, and 4.4% for Infrastructure/Construction Goods.
Consumer durables also exhibited a strong performance, with an 8.6% growth rate, driven by rising consumer demand. However, Consumer non-durables showed a decline of 1.4%, indicating some softness in this segment. The robust growth in Primary Goods, Consumer Durables, and Infrastructure/Construction Goods highlights the ongoing investments and consumer spending in the economy.
Revisions and Future Projections
In addition to the Quick Estimates for June 2024, MoSPI also released revised figures for May 2024 and final revisions for March 2024. The first revision of the May 2024 indices and the final revision for March 2024 have been compiled with weighted response rates of 95% and 96% respectively, reflecting a high level of accuracy and reliability in the data collection process.
The government remains optimistic about the industrial sector’s growth trajectory, with expectations of continued recovery in the coming months. The next release, which will provide the IIP data for July 2024, is scheduled for September 12, 2024.
The industrial sector’s performance in June 2024 underscores the ongoing recovery in India’s economy. With sustained growth in key sectors such as Mining, Electricity, and certain Manufacturing subsectors, the outlook remains cautiously optimistic. However, the decline in Consumer non-durables serves as a reminder of the challenges that still need to be addressed to ensure balanced and inclusive industrial growth.
As the country looks ahead, the focus will be on maintaining this growth momentum and addressing any emerging challenges to sustain the positive trajectory of the industrial sector.
