Photo used for representation purpose only.

India’s industrial output growth slowed to 4.9% in March from 5.6% in February, as per the National Statistical Office, with base effects from last March when output had tanked 1.9%, boosting the uptick. Mining output slid to a 19-month low growth of 1.2%, while electricity generation rose 8.6% from a 1.6% contraction in March 2023.

Manufacturing, which constitutes 77.6% of the Index of Industrial Production (IIP), grew at a five-month high pace of 5.2% in March, relative to a mild 1.5% uptick in the same month last year. Manufacturing growth for February was revised downwards to 4.9% from 5% estimated earlier, along with the month’s IIP growth which was downgraded from 5.7%.

Overall industrial output grew 5.8% in 2023-24, a tad higher than the 5.2% rise in the previous year, with manufacturing output growing 5.5% compared with 4.7% in 2022-23 and mining output accelerating by 7.5% last year from a 5.8% rise in the preceding year. Electricity generation grew 7.1% in 2023-24, easing from an 8.9% surge in the previous year.

Seven of 23 major manufacturing segments recorded a contraction in March, but as many as ten segments reported a drop in output through 2023-24, including wearing apparel (-14.2%), computers and electronics (-11.4%), furniture (-6.9%), wood products (-5.9%), chemicals (-1.7%) and leather (-1.1%).

Consumer goods remained the weakest performers through last year, despite beneficial base effects. Consumer durables grew the weakest at 3.6% compared with a meagre 0.6% rise in 2022-23, while non-durables rose 4% vis-à-vis a 0.7% uptick in the previous year.

In March, consumer durables output recorded the sharpest surge for the second month in a row, rising 9.5%, albeit over an 8% contraction in March 2023. In February, they had grown 12.3% relative to a 4.1% contraction a year ago. Consumer non-durables broke a two-month streak of contraction to rise 4.9%, but again over a weak base from March 2023, when they shrank 1.9%.

“The consumption scenario remained mixed last year with urban demand showing resilience while rural demand continued to lag,” said Rajani Sinha, CareEdge Ratings’ chief economist. While hopes of a good monsoon, moderating inflation, and pick-up in rural demand are positives, a broad-based and durable improvement in consumption remains the key monitorable this year, she stressed.

Infrastructure and construction goods continued to record healthy growth at 6.9% in March, while capital goods growth picked up to 6.1% from just 1.2% in February. Intermediate goods and primary goods rose 5.1% and 2.5%, respectively.

Over the full year gone by, Infrastructure and Construction goods recorded the strongest growth of 9.6% over an 8.4% rise in 2022-23, followed by capital goods which grew 6.2% compared with a 13.1% rise in the previous year. Primary and intermediate goods grew 6% and 5.2%, respectively.

Although a majority of high-frequency indicators have seen an uptick in April over March trends, ICRA chief economist Aditi Nayar said she expects industrial output growth to slow to around 3% to 4% in April owing to base effects as the same month had seen a 4.6% uptick in 2023.

In absolute terms, the industrial output index was up 8.22% from February with a sequential rise in output recorded in Manufacturing, Mining and Electricity, as well as the six end-use-based classifications of factory output.

Electricity generation rose 8.6% in march 2024 from a 1.6% contraction in March 2023. File
| Photo Credit: The Hindu

India’s industrial output growth slowed to 4.9% in March from 5.6% in February, as per the National Statistical Office, with base effects from last March when output had tanked 1.9%, boosting the uptick. Mining output slid to a 19-month low growth of 1.2%, while electricity generation rose 8.6% from a 1.6% contraction in March 2023.

Manufacturing, which constitutes 77.6% of the Index of Industrial Production (IIP), grew at a five-month high pace of 5.2% in March, relative to a mild 1.5% uptick in the same month last year. Manufacturing growth for February was revised downwards to 4.9% from 5% estimated earlier, along with the month’s IIP growth which was downgraded from 5.7%.

Overall industrial output grew 5.8% in 2023-24, a tad higher than the 5.2% rise in the previous year, with manufacturing output growing 5.5% compared with 4.7% in 2022-23 and mining output accelerating by 7.5% last year from a 5.8% rise in the preceding year. Electricity generation grew 7.1% in 2023-24, easing from an 8.9% surge in the previous year.

Seven of 23 major manufacturing segments recorded a contraction in March, but as many as ten segments reported a drop in output through 2023-24, including wearing apparel (-14.2%), computers and electronics (-11.4%), furniture (-6.9%), wood products (-5.9%), chemicals (-1.7%) and leather (-1.1%).

Consumer goods remained the weakest performers through last year, despite beneficial base effects. Consumer durables grew the weakest at 3.6% compared with a meagre 0.6% rise in 2022-23, while non-durables rose 4% vis-à-vis a 0.7% uptick in the previous year.

In March, consumer durables output recorded the sharpest surge for the second month in a row, rising 9.5%, albeit over an 8% contraction in March 2023. In February, they had grown 12.3% relative to a 4.1% contraction a year ago. Consumer non-durables broke a two-month streak of contraction to rise 4.9%, but again over a weak base from March 2023, when they shrank 1.9%.

“The consumption scenario remained mixed last year with urban demand showing resilience while rural demand continued to lag,” said Rajani Sinha, CareEdge Ratings’ chief economist. While hopes of a good monsoon, moderating inflation, and pick-up in rural demand are positives, a broad-based and durable improvement in consumption remains the key monitorable this year, she stressed.

Infrastructure and construction goods continued to record healthy growth at 6.9% in March, while capital goods growth picked up to 6.1% from just 1.2% in February. Intermediate goods and primary goods rose 5.1% and 2.5%, respectively.

Over the full year gone by, Infrastructure and Construction goods recorded the strongest growth of 9.6% over an 8.4% rise in 2022-23, followed by capital goods which grew 6.2% compared with a 13.1% rise in the previous year. Primary and intermediate goods grew 6% and 5.2%, respectively.

Although a majority of high-frequency indicators have seen an uptick in April over March trends, ICRA chief economist Aditi Nayar said she expects industrial output growth to slow to around 3% to 4% in April owing to base effects as the same month had seen a 4.6% uptick in 2023.

In absolute terms, the industrial output index was up 8.22% from February with a sequential rise in output recorded in Manufacturing, Mining and Electricity, as well as the six end-use-based classifications of factory output.

Photo used for representation purpose only.
| Photo Credit: K. Pichumani

India’s industrial output growth hit a three-month low of 3.7% in June, from a revised 5.3% in May, according to official data, with consumer durables’ production slipping back into contraction mode, and manufacturing growth slowing to 3.1% from 5.8% in May.

The data released by National Statistical Office stated that mining output grew 7.6% in June, while Electricity generation, which had recorded a 0.9% uptick in May after two months of contraction, picked up pace to rise 4.2% in June.

Direct tax collections

India’s net direct tax collections had risen 17.33% as of August 10, with a kitty of ₹5.84 lakh crore that constitutes 32.03% of the total Budget Estimates from Direct Taxes in 2023-24.

Gross direct tax collections were at ₹6.53 lakh crore, as of August 10, 15.73% higher than the revenues for the corresponding period of last year. Refunds issued to taxpayers so far this year stand at ₹69,000 crore, 3.73% higher than this time last year.

Overall industrial output levels were, however, 1.2% below May.

Consumer durables, which had recorded the first uptick in six months during May to rise 1.23%, shrank a sharp 6.9% in June. Overall production of durables remains 2.8% below last year’s levels in the first quarter of 2023-24.

Infrastructure and construction goods continued a strong double-digit growth streak for the third month in a row, rising 11.3% in June. However, their output was 1.6% lower than May.