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The Hindu
16 hours ago
- Business
- The Hindu
Interrupted growth: on economic activity, climate-related events
The Index of Industrial Production (IIP), the nation's monthly barometer of goods output, revealed a 10-month low growth rate in June, at 1.5%, largely due to the sharp contraction in mining activity, by –8.7% (10.3% in June 2024), and electricity output, by –2.6% (8.6% in June 2024). The early onset of the southwest monsoon, with its erratic and uneven distribution, led to water logging in large parts of the mining belts in Odisha, Jharkhand and West Bengal, hampering a key economic activity. Ranchi's regional meteorological office has said that Jharkhand recorded 504.8 mm (against a normal of 307 mm) between June 1 and July 12 — but five districts were categorised as rain deficient. The resultant damage to the power distribution infrastructure and disruptions to supply chains may have contributed to the sluggish growth in industrial output at 3.9% in June, up from 3.5% a year ago. This in turn, is likely to have led to subdued power demand. While mining and power production collectively make up for almost a quarter (22.3%) of the IIP's weightage, the rest is apportioned for manufacturing activities. The robust growth in capital (3.5%), intermediate (5.5%) and infrastructure (7.2%) goods output, indicates that much of industrial growth continues to hinge on the government's infrastructure spends. There has been a general reluctance, both institutionally and in public economic discourse in India, to explicitly correlate disruptions in economic activity with climate-related events, especially in official narratives such as the IIP or GDP data releases. The Ministry of Statistics and Programme Implementation and the Reserve Bank of India (RBI) tend to frame industrial and economic under-performance in terms of 'high base effects; supply chain bottlenecks; input cost fluctuations; global demand softening; and domestic consumption contraction'. Climate-related disruptions, such as in mining belts, are rarely mentioned in IIP or national accounts commentary. Economic data agencies in India have been slow to integrate climate risk frameworks into routine macroeconomic reporting, unlike institutions such as the European Central Bank or the Bank of England which have begun mapping climate risk to output and financial stability. True, climate attribution is complex: linking a specific event such as waterlogging in a coal mine to broader climate change involves scientific rigour and probabilistic modelling. Policymakers often avoid this due to fear of politicising economic data. Indeed, the RBI's Financial Stability Reports now include climate-related risks. But this has not yet filtered into production-side metrics such as the IIP. The time has come for India to make a systemic shift to integrate climate attribution to economic activity.
Hans India
a day ago
- Business
- Hans India
Factory output edges up in June
New Delhi: India'sindustrial growth, based on the Index of Industrial Production (IIP), recorded a 1.5 per cent growth in June this year, driven by a stronger performance in the manufacturing sector, according to data released by the Ministry of Statistics on Monday. The data showed that the manufacturing sector, which provides quality jobs for the young graduates passing out of the country's universities and engineering institutes, registered a 3.9 per cent growth in June this year over the same month of the previous year. The overall index of industrial production during June was higher than the 1.2 per cent registered in the preceding month of May. Within the manufacturing sector, 15 out of 23 industry groups recorded a positive growth in June over the same moth of the previous year. The top three positive contributors for the month are – Manufacture of basic metals (9.6%), Manufacture of coke and refined petroleum products (4.2%) and Manufacture of fabricated metal products, except machinery and equipment (15.2%), according to the official statement. In the industry group 'Manufacture of basic metals', item groups 'MS slabs', 'HR coils and sheets of mild steel' and 'Pipes and tubes of Steel' have shown significant contribution in growth. The figures on use-based classification show that the production of capital goods, which comprise machines used in factories, went up by robust 3.5 per cent in June. This segment reflects the real investment taking place in the economy which has a multiplier effect on the creation of jobs and incomes going ahead. The production of consumer durables such as refrigerators, air conditioners and TV sets increased by 2. 9 per cent during the month, reflecting the rise in demand for these products with a rise in incomes.
Indian Express
2 days ago
- Business
- Indian Express
June industrial growth falls to 10-month low of 1.5%
India's industrial growth fell to a 10-month low of 1.5 per cent in June on the back of a fall in output of mining and electricity sectors. The Index of Industrial Production (IIP), which had risen 1.9 per cent in May and 4.9 per cent in June 2024, rose in June primarily due to the manufacturing sector – which makes up more than three quarters of the index – posting a 3.9 per cent year-on-year (YoY) rise in its output, up from 3.2 per cent in May, according to the data released on Monday by the Ministry of Statistics and Programme Implementation. Meanwhile, mining sector output contracted by 8.7 per cent, while electricity generation was down 2.6 per cent. In May, mining output had declined by 0.1 per cent, while that of electricity had fallen 4.7 per cent. 'The slowdown in IP growth in June was led by deeper contraction in the mining sector, shaving off 124 basis points (bps) from headline, even as both manufacturing and electricity generation added to headline IP. A high base effect was at play in the mining sector, aggravating the sharp sequential decline that the index witnessed in June vs May,' Barclays economists said in a note. At 1.5 per cent, the June industrial growth figure takes the average for April-June to 2 per cent, the lowest in 11 quarters. In the first quarter of 2025, the average IIP growth was 3.9 per cent. Industrial activity, particularly in the mining sector, was dampened in April-June due to excessive rains, which also cooled temperatures and reduced the demand for power. This was reflected in lower electricity generation. As per the use-based classification, June saw capital goods output growth slump to 3.5 per cent from 13.3 per cent in May, while the production of primary and consumer non-durables continued to be lower compared to a year ago. On the other hand, output of consumer durables rose 2.9 per cent in June after shrinking by 0.9 per cent in May. 'On the demand side, signals remain mixed. Urban consumption, in particular, remains lagging. Nonetheless, consistent easing of inflation, a favourable monsoon, and recent policy rate cuts by the Reserve Bank of India are positives for the consumption scenario going forward. Against this backdrop, both demand and investment trends will need to be watched closely in the coming months,' CareEdge group chief economist Rajani Sinha said, adding that private capital expenditure is yet to show meaningful traction, although public investment continues to remain encouraging. Production of intermediate and infrastructure goods rose at a faster clip in June compared to May. While intermediate goods output growth rose to 5.5 per cent from 4.7 per cent in May, that of infrastructure goods increased to 7.2 per cent from 6.7 per cent.
Economic Times
2 days ago
- Business
- Economic Times
Industrial Output Growth Slows to 10-mth Low in June
ANI Representational image Our BureauNew Delhi: India's industrial output growth slowed to a 10-month low at 1.5% in June, pulled down by contraction in mining and electricity sectors and subdued performance by the manufacturing sector, official data showed Monday. The Index of Industrial Production (IIP) expanded 1.9% in May and 4.7% in June 2024. "Excess rains in the second half of June 2025 are likely to have weighed on mining output, while also leading to a contraction in electricity generation, although the extent of the same narrowed compared to the previous month," said Aditi Nayar, chief economist at ratings firm ICRA. Among the three major sectors, only manufacturing grew in June, by 3.9%. Production shrank 8.7% in mining and 2.6% in electricity. "A marginal pickup in the manufacturing sector growth was more than offset by contraction in both the mining and electricity sector output," said Rajani Sinha, chief economist at CareEdge IIP growth dropped to 2% in the first quarter of the current fiscal year from 5.4% a year estimates industrial GVA (gross value added) growth to have decelerated in the first quarter ended GVA growth was 6.8% in the January-March quarter. Official figures for the June quarter will be released in the manufacturing sector, 15 of the 23 industry groups recorded growth in terms of use-based classification, two out of the six categories recorded a contraction: primary goods (3%) and consumer non-durables (0.4%)."The contraction in primary goods output reflects the weaker performance of mining," noted the positive side, infrastructure/construction goods led growth with a 7.2% increase."While private capex is yet to show meaningful traction, public capex continues to remain encouraging. However, persistent global uncertainties are weighing on the overall investment sentiment," said Sinha.
Time of India
2 days ago
- Business
- Time of India
Industrial Output Growth Slows to 10-mth Low in June
Our Bureau New Delhi: India's industrial output growth slowed to a 10-month low at 1.5% in June, pulled down by contraction in mining and electricity sectors and subdued performance by the manufacturing sector, official data showed Monday. Explore courses from Top Institutes in Please select course: Select a Course Category Digital Marketing healthcare Product Management Others MBA Data Science Design Thinking Degree Operations Management Cybersecurity Data Science Data Analytics others Project Management Leadership Finance Technology MCA PGDM CXO Artificial Intelligence Public Policy Healthcare Management Skills you'll gain: Digital Marketing Strategy Search Engine Optimization (SEO) & Content Marketing Social Media Marketing & Advertising Data Analytics & Measurement Duration: 24 Weeks Indian School of Business Professional Certificate Programme in Digital Marketing Starts on Jun 26, 2024 Get Details Skills you'll gain: Digital Marketing Strategies Customer Journey Mapping Paid Advertising Campaign Management Emerging Technologies in Digital Marketing Duration: 12 Weeks Indian School of Business Digital Marketing and Analytics Starts on May 14, 2024 Get Details The Index of Industrial Production (IIP) expanded 1.9% in May and 4.7% in June 2024. "Excess rains in the second half of June 2025 are likely to have weighed on mining output, while also leading to a contraction in electricity generation, although the extent of the same narrowed compared to the previous month," said Aditi Nayar, chief economist at ratings firm ICRA . Among the three major sectors, only manufacturing grew in June, by 3.9%. Production shrank 8.7% in mining and 2.6% in electricity. Live Events "A marginal pickup in the manufacturing sector growth was more than offset by contraction in both the mining and electricity sector output," said Rajani Sinha, chief economist at CareEdge Ratings. Average IIP growth dropped to 2% in the first quarter of the current fiscal year from 5.4% a year earlier. Nayar estimates industrial GVA (gross value added) growth to have decelerated in the first quarter ended June. Industrial GVA growth was 6.8% in the January-March quarter. Official figures for the June quarter will be released in August. Within the manufacturing sector, 15 of the 23 industry groups recorded growth in June. In terms of use-based classification, two out of the six categories recorded a contraction: primary goods (3%) and consumer non-durables (0.4%). "The contraction in primary goods output reflects the weaker performance of mining," noted Nayar. On the positive side, infrastructure/construction goods led growth with a 7.2% increase. "While private capex is yet to show meaningful traction, public capex continues to remain encouraging. However, persistent global uncertainties are weighing on the overall investment sentiment," said Sinha.
