IGI Logo

Below the Perspective on IIP data by Ms. Rajani Sinha, Chief Economist, CareEdge

“As expected, growth in India’s industrial production moderated to a 9-month low of 1.2% in May. Slowdown in manufacturing growth along with contraction in both the mining and electricity sectors dragged down the overall IIP growth. From the consumption perspective, weakness in output of consumer non-durable goods has persisted. Moreover, growth in consumer durables has slipped into the negative territory following encouraging growth in the preceding months. Several factors such as easing food inflation, policy rate cuts and favourable prospects for monsoon are playing out positively for the consumption scenario. These should aid in strengthening the overall demand in the economy. Demand recovery in both the urban and rural segments remains critical.

On the investment front, the performance in capital goods and infrastructure/construction goods has shown an encouraging trend rising by 14.1% and 6.3%, respectively. The Centre’s capital expenditure gained momentum towards the end of FY25 and has maintained an encouraging trend in the first two months of the current fiscal. This bodes well for the investment scenario in the economy. However, private capex remains subdued, with global economic uncertainty further dampening the investment sentiments. Overall, both demand and investment trends remain crucial monitorables for the industrial performance going forward.”

Above views are of the author and not of the website kindly read disclaimer