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Published: Feb 11, 2023
Updated: Feb 11, 2023

India's Industrial Growth Takes a Hit: IIP Declines to 4.3% in December 2022

The Indian industrial sector has taken a hit in recent times, as evidenced by the latest data released by the Ministry of Statistics and Programme Implementation. The Index of Industrial Production (IIP) growth figure for December 2022 stands at a mere 4.3 percent, which is far below the revised number of 7.3 percent recorded in November. This slowdown in industrial activity has been attributed to the decline in external demand.

Sector-Wise Analysis:

A closer look at the data reveals that the manufacturing sector, which forms the backbone of the Indian economy, has recorded a modest growth of 2.6 percent in December 2022. The electricity sector, on the other hand, has recorded a growth of 10.4 percent, making it the sector with the highest production growth during the month. The mining sector also recorded a growth of 9.8 percent.

Use-Based Classification:

The use-based classification indices provide a comprehensive picture of the industrial scenario in India during December. The indices stand at 144.8 for primary goods, 100 for capital goods, 151.3 for intermediate goods, and 166.6 for infrastructure or construction goods. This data highlights the varying levels of growth across different sectors within the Indian economy.

Consumer Durables and Non-Durables:

The indices for consumer durables and non-durables stand at 109.7 and 173.2 respectively for the month of December, providing insights into the consumer sentiment and spending patterns in the country. A higher index for consumer non-durables indicates a positive consumer sentiment and an increase in consumer spending.

April-December 2022 Overview:

The latest data shows that India's industrial output has grown by 5.4 percent on a year-on-year basis for the April-December 2022 period. This growth, however, is a significant drop from the 15.3 percent recorded in the first eight months of FY22. This decline in industrial output can be attributed to several factors, including the slowdown in external demand and the COVID-19 pandemic, which has had a widespread impact on the global economy.

The recent decline in India's IIP growth is a cause for concern. The slowdown in external demand has impacted the country's industrial activity, leading to a decline in industrial growth. The manufacturing sector's modest growth and the high production growth in the electricity sector provide a mixed picture of the industrial scenario in the country. The use-based classification and consumer durables and non-durables indices give a comprehensive picture of the current state of the Indian economy. The Indian government and the private sector must take proactive measures to revive the industrial sector and boost the country's economic growth.