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February’s Industrial Output Surges: A Sign of Economic Recovery

February 2024 marked a significant rise in India’s industrial landscape, with the Index of Industrial Production (IIP) advancing to 147.2 from January’s 143.9. This growth was broad-based, with the mining sector escalating from 135.8 to 139.6, manufacturing climbing from 141.0 to 144.5, and electricity generation making a notable jump to 187.1 from 181.3.

Growth in Use-based Categories: Primary Goods, Capital Goods, Intermediate Goods

Delving into the specifics, every use-based category witnessed growth. Primary goods increased to 148.2 from 145.1, and capital goods nudged up to 106.2 from 105.7. The leap in intermediate goods to 158.9 was fueled by higher production in sectors like basic metals, chemicals, and textiles. The infrastructure/construction sector, too, benefited from increased production of cement and steel, rising to 179.8. The production of consumer durables, such as refrigerators and air conditioners, rose to 121.6 in preparation for the warmer months ahead, while consumer non-durables, including food and tobacco products, climbed to 148.9 from 144.2.

Also read: India’s Q3 GDP Growth Surpasses Expectations, Reaches 8.4% YoY

Revisions of past data reflect a commitment to accuracy, with January 2024’s IIP figures corrected to 143.9 from 142.6 and November 2023’s figures revised upward to 150.1 from 149.8.

Year-over-Year Growth vs. Month-to-Month Contraction

The overall uplift in February’s IIP by 5.7% from January’s 4.1% underscores a resurgence across major sectors—manufacturing, mining, and electricity—which all recorded vigorous year-over-year growth. However, despite these gains, a month-to-month contraction of 4.1% highlights the cyclical challenges within the shorter month of February.

Promising Signs and Ongoing Challenges

Consumer durables, despite showing a robust year-over-year increase of 12.3%, faced a slight month-to-month contraction of 0.1%. More concerning is the consumer non-durables sector, which contracted by 3.8% in February, underscoring that the path to a full-fledged industrial recovery remains complex and uneven, particularly in sectors sensitive to consumer demand. This February peak in industrial production is a promising sign of economic vitality, but it also serves as a reminder that the recovery is not yet uniform across all sectors.

As India moves forward, it will be crucial to address these disparities to ensure a stable and inclusive industrial expansion.

By Anamika Singh, Asst. Professor & BMS Coordinator, Sainath Education Trust’s Rajiv Gandhi College of Arts, Commerce and Science.