What's New :
UPSC Interview Guidance Program. Register here...

Growth dichotomy

  • Published
    15th Nov, 2023


Slowdown in industrial output growth shows low consumer confidence.

Sluggish Industrial Growth

  • Sluggish Growth in Industrial Output: September's IIP growth at 5.8% marked a significant slowdown from the previous month's 10.3%, falling short of the anticipated 7% to 8%.
  • Economic Indicator: The IIP serves as a critical economic indicator, revealing a concerning trend of sluggish industrial output and reflecting challenges in the overall economic landscape.
  • Concerns and Expectations: The subdued IIP growth raises concerns about industrial momentum, falling below economists' expectations, prompting scrutiny of factors influencing the slowdown and broader economic implications.

Diverse Sectoral Challenges:

  • Sectoral Contractions and Inventory Concerns: September witnessed contractions in nine manufacturing sectors, including significant drops in furniture and apparel production. Hopes for pre-festive season inventory buildup were dispelled.
  • Low Consumer Confidence:Consumer confidence remains subdued, with minimal growth in consumer durables and non-durables. Fast-moving consumer goods experienced a 3.5% decline, indicating restrained spending habits.
  • Economic Asymmetry and Resilience:The IIP reflects an economic asymmetry, with investment-linked sectors showing resilience, contrasting the challenges faced by consumer-centric segments, emphasizing the need for balanced economic recovery strategies.

Economic Divergence and Future Challenges:

  • Economic Disparity and Q2 Performance:Q2 witnesses 7.4% average factory output growth, aligning with the central bank's Q2 GDP growth hopes, showcasing economic disparities.
  • Consumer vs. Investment Sectors:Consumer goods, especially durables, lag behind pre-COVID-19 levels, contrasting with resilient growth in investment-linked sectors like infrastructure and construction goods.
  • Challenges and Future Outlook:Challenges ahead include potential moderation in capex spends, uncertainties in sensitive commodity prices, and declining output in infrastructure and construction goods, emphasizing consumption's critical role.
You must be logged in to get greater insights.
GS Mains Classes GS Classes 2024 GS Classes 2024 UPSC Study Material

Verifying, please be patient.

Our Centers

DELHI (Karol Bagh)

GS SCORE, 1B, Second Floor, Pusa Road, Karol Bagh, New Delhi - 110005 (Beside Karol Bagh Metro Station Gate No. 8)

Get directions on Google Maps

BHUBANESWAR (Jaydev Vihar)

GS SCORE, Plot No.2298, Jaydev Vihar Square, Near HCG Day Care, BBSR - 751013

Get directions on Google Maps

LUCKNOW (Aliganj)

GS SCORE, 2nd Floor, B-33, Sangam Chauraha, Sector H, Aliganj, Lucknow, UP - 226024

Get directions on Google Maps

Enquire Now