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Industrial Growth Hits Four-Month High
Context:
India’s Index of Industrial Production (IIP) grew 3.5% in July 2025, the highest in four months, led by recovery in manufacturing, electricity, capital, and consumer goods sectors.
Index of Industrial Production (IIP):
- Released monthly by National Statistical Office (NSO), Ministry of Statistics and Programme Implementation (MoSPI).
- Base Year: 2011–12.
- Measures volume growth of industries grouped under Mining, Manufacturing, and Electricity.
- Uses Laspeyres formula for index calculation.
Sectoral Performance (July 2025):
- Manufacturing: +5.4% (six-month high; improvement in metals, machinery, mineral products).
- Electricity: +0.6% (returning to growth after two months of contraction).
- Mining: –7.2% (fourth consecutive month of contraction, due to monsoon impact and weak demand).
- Capital Goods: +5% (on a high base; reflects investment revival).
- Consumer Durables: +7.7% (seven-month high).
- Consumer Non-Durables: +0.5% (eight-month high, but very marginal).
Significance:
- Acts as a short-term indicator of industrial health.
- Affects GDP estimates, inflation trajectory, monetary policy decisions.
- Mining contraction raises concerns on raw material supply, while strong growth in capital goods indicates revival of private investment cycle.
- Divergence in electricity and mining growth highlights monsoon impact on industrial activity
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