September's industrial production data reveals a troubling paradox: while consumer durables and automobiles surge on festive demand, the broader manufacturing base is shrinking, with staples contracting and robust growth concentrated in just five of 23 sectors
The weaker print can be attributed to a tepid manufacturing quarter, impacted by heavy rains in parts of the country and temporary disruptions linked to the GST rate rationalisation implemented in late September
Steel, cement hold firm even as refinery and gas production contract
Mining emerged as the best performer, rising to a 14-month high of 6 percent after contracting 7.2 percent in July. Electricity output also improved modestly, growing 4.1 percent compared with 3.7 percent in the previous month
The pickup in August core sector growth was led by coal, steel and cement, even as crude oil, natural gas and refinery products continued to underperform.
The uptick was in contrast with the performance of the eight core industries, which together carry a 40 percent weight in the Index of Industrial Production (IIP)
Core sector weakness and coal contraction weigh on quarterly industrial output
In April, gross GST collections had hit an all-time high of Rs 2.37 lakh crore
The quarterly outlook for manufacturing also seems to be better, with the index reading at 58.1 compared with 57.4 in the previous month
The decline corresponds with a dip in core sector performance. Core sector growth slumped to a nine-month low of 0.7 percent in May from 1 percent in the previous month
The government believes that after an exhaustive Annual Survey of Industries has been put in place, a chain-based index can better capture the changes in India's production patterns.
Industrial production growth slowed to 4 percent in FY25, reflecting weak domestic demand and global uncertainty, with March growth flat at 3 percent.
The core sector, which has a 40 percent weight in IIP, grew at 3.8 percent, up from 3.4 percent in the previous month, as steel, cement and electricity picked up
The core sector, which has a 40 percent weight in the index of industrial production, had slipped to a five-month low in February
The core sector slipped in January, as infrastructure industries' growth declined to 4.6 percent from 4.8 percent in the previous month
The dip in industrial production follows a decline in core sector output, which slipped to 4 percent from 4.4 percent in the previous month
India’s core sector output had expanded to a four-month high of 4.3 percent in November compared with 3.7 percent in the previous month
Industrial production had increased to a three-month high of 3.5 percent in October, helped by the festive season push
The new series is expected to be available in the last quarter of FY26, when the government also plans to release new growth and consumer inflation numbers
Not only did food prices fall by 0.6 percent from the previous month, but overall retail prices too were also lower by 0.15 percent
Both urban and rural unemployment data will be released monthly. The earlier plan was to release numbers related only to urban workforce participation.
The two-part capex survey will have one section on investments made in the past year, and the other on investment expectations for the next two years. The time use survey will capture the trends on unpaid and paid workers across gender
The government has been trying to transition to producer price index.
The government will start work on the first annual capex survey from October
WPI, CPI estimates are over a decade old