Headline Figure
- IIP growth slowed to 2.7% in April 2025, an 8-month low.
- Last lower reading: 0.0% in August 2024 — suggests waning momentum.
Relevance : GS 3(Indian Economy)
Sector-wise Performance
- Mining & Quarrying:
- Declined by 0.2% (worst since August 2024).
- Indicates weak commodity extraction and upstream supply constraints.
- Electricity:
- Slower growth → possible lower power demand from industries or supply issues.
- Primary Goods & Infrastructure/Construction Goods:
- Weakness indicates sluggish investment and infrastructure activity.
- Consumer Non-Durables:
- Indicates muted rural or essential consumption.
- Reflects subdued demand for everyday goods, despite summer season.
Outlier Performance
- Capital Goods:
- Grew 20.3% in April 2025.
- However, base effect significant: April 2024 growth was only 2.81%.
- Still suggests private and public sector investment push or cyclical recovery in machinery output.
Concerns and Implications
- Broad-based slowdown across production-linked sectors hints at underlying demand weakness.
- Poor mining and electricity data may hurt core industries and downstream production.
- Weak consumer non-durables → possible rural distress or price sensitivity among consumers.
- Contradicts the capital goods surge, showing a mixed recovery picture.
Policy Relevance
- Monetary Policy Implication:
- Slower IIP may deter further rate hikes by RBI despite inflation concerns.
- Fiscal/Policy Focus:
- Government may need to accelerate capital expenditure and rural support measures.
- Focus on demand stimulation in consumer sectors.
Way Forward
- Address supply chain bottlenecks in mining and electricity.
- Sustain capital goods momentum through infrastructure pipeline.
- Monitor inflation-consumption balance to revive non-durable consumption.
- Ensure industrial recovery is broad-based and demand-driven, not just investment-led.
