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Economic Times
5 days ago
- Business
- Economic Times
IIP growth slows to 8-month low in April over decline in mining output
Agencies Only 11 of 23 mfg sectors had higher on-year growth than overall output growth in April NEW DELHI: India's industrial production growth fell to an eight-month low of 2.7% in April, dragged down by a contraction in mining output, high base effect and moderation in electricity production, official data released on Wednesday showed. The Index of Industrial Production (IIP) had expanded 3.9% in the previous month and 5.2% in April 2024. Manufacturing grew 3.4% in the first month of 2025-26 on the back of a solid expansion in the automobile sector. While mining output contracted 0.2%, electricity generation increased a muted 1.1% year-on-year in April. Within the manufacturing sector, 16 out of the 23 industry groups recorded positive growth. "The slowdown, albeit mild, was broad-based driven by a weaker performance across all the three production sectors," said Aditi Nayar, chief economist, ICRA. Only 11 of the total 23 manufacturing sub-sectors had a higher on-year growth than overall output growth in April, illustrating the skewness in industrial growth, according to Paras Jasrai, economist at India Ratings and Research. The silver lining in the data was the consumer durables and capital goods sector. The 6.4% expansion in consumer durables was driven by a 10.5% growth in electronic goods ahead of the upcoming marriage season. The auto sector reported a solid 15.4% growth. However, consumer non-durables output declined 1.7%, highlighting the urban-rural divide."Going ahead, the domestic consumption landscape remains a key monitorable due to the prevailing unevenness in demand recovery... the continued improvement in the inflation scenario led by easing of food inflation is a key tailwind for the demand recovery," said Rajani Sinha, chief economist, CareEdge Ratings.A 20.3% increase in capital goods was supported by both electrical and non-electrical machinery. "It needs to be seen if this is maintained in the coming months as one is looking at investment to pick up," said Madan Sabnavis, chief economist, Bank of Baroda. Infrastructure and construction goods output increased 4% in April while primary goods saw a marginal contraction of 0.4 %."On the whole the performance is encouraging and it will be important that there is further pickup in coming months," Sabnavis expect the unseasonal rains to impact construction goods output and keep factory output growth under 2% on-year in May.
Time of India
5 days ago
- Business
- Time of India
IIP growth slows to 8-month low in April over decline in mining output
NEW DELHI: India's industrial production growth fell to an eight-month low of 2.7% in April, dragged down by a contraction in mining output, high base effect and moderation in electricity production, official data released on Wednesday showed. The Index of Industrial Production ( IIP ) had expanded 3.9% in the previous month and 5.2% in April 2024. Manufacturing grew 3.4% in the first month of 2025-26 on the back of a solid expansion in the automobile sector. While mining output contracted 0.2%, electricity generation increased a muted 1.1% year-on-year in April. Within the manufacturing sector , 16 out of the 23 industry groups recorded positive growth. "The slowdown, albeit mild, was broad-based driven by a weaker performance across all the three production sectors," said Aditi Nayar, chief economist, ICRA . Only 11 of the total 23 manufacturing sub-sectors had a higher on-year growth than overall output growth in April, illustrating the skewness in industrial growth, according to Paras Jasrai, economist at India Ratings and Research . Live Events The silver lining in the data was the consumer durables and capital goods sector. The 6.4% expansion in consumer durables was driven by a 10.5% growth in electronic goods ahead of the upcoming marriage season. The auto sector reported a solid 15.4% growth. However, consumer non-durables output declined 1.7%, highlighting the urban-rural divide. "Going ahead, the domestic consumption landscape remains a key monitorable due to the prevailing unevenness in demand recovery... the continued improvement in the inflation scenario led by easing of food inflation is a key tailwind for the demand recovery," said Rajani Sinha, chief economist, CareEdge Ratings. A 20.3% increase in capital goods was supported by both electrical and non-electrical machinery. "It needs to be seen if this is maintained in the coming months as one is looking at investment to pick up," said Madan Sabnavis, chief economist, Bank of Baroda . Infrastructure and construction goods output increased 4% in April while primary goods saw a marginal contraction of 0.4 %. "On the whole the performance is encouraging and it will be important that there is further pickup in coming months," Sabnavis said. Economists expect the unseasonal rains to impact construction goods output and keep factory output growth under 2% on-year in May.
The Hindu
26-05-2025
- Business
- The Hindu
Tamil Nadu's capital expenditure grew over 16% in fiscal 2025
Tamil Nadu's capital expenditure grew over 16% to ₹46,076.54 crore in fiscal 2025, when compared to ₹39,540.90 crore in fiscal 2024, according to the preliminary un-audited provisional figures from the Comptroller and Auditor General of India (CAG). Capital expenditure (capex) goes towards creation of fixed assets, such as roads and bridges, irrigation structures, schools, hospitals, along with investments made in Public Sector Undertakings. It helps in improving economic activity and generating employment. The capital expenditure for fiscal 2025 is also in line with the projection made in the revised estimates. The overall Capital Expenditure in the Revised Estimates was projected at ₹46,766 crore, as compared to ₹47,681 crore in the initial Budget Estimates for 2024-25, as per the State Budget for 2025-2026. 'The 16% growth in fiscal 2025 indicates a sustained focus on capex by the State government. The capex growth achieved in fiscal 25 provisional is much better than the compounded annual growth rate (CAGR) of 12.3% during fiscal 2018-2024,' Paras Jasrai, associate director, India Ratings & Research, said. He said this is a positive development. 'In fact, a better way to look at it is comparing the actual overall capex (including loans and advances) as a proportion of the budgeted numbers. A closer look at the data reveals that Tamil Nadu has met 95.2% of the budgeted target in fiscal 2025, which is much better than fiscal 2024 number of 86.2% and 95.4% in fiscal 2023, as well as the average of 88.1% during FY18-FY24,' Mr. Jasrai said. According to him, the State has also fared better in terms of quality of expenditure. The quality of expenditure can be gauged by capital outlay to total expenditure (COTE). The COTE stood at 12.2% in fiscal 2025 provisional numbers and has hit a three-year high (it was 12.6% in fiscal 2022), Mr. Jasrai said. The metric for fiscal 2025 provisional is also better than the average of 11.4% during fiscal 2018-fiscal 2024. For fiscal 2026, the State government has estimated capital expenditure of ₹57,231 crore, which is a growth of 22.38% from the revised estimates for fiscal 2025. The total capital outlay of the State, including Net Loans and Advances, is estimated at ₹65,328 crore in the Budget Estimates 2025-26. 'Capex remains a sustained focus for the government, which is quite favourable for the continuing the economic momentum in the state. The State has been actively focusing on fiscal consolidation as evident even in the FY26 budget,' Mr. Jasrai said.
Indian Express
21-05-2025
- Business
- Indian Express
As core sector growth hits 8-month low in April, a cascading impact likely on factory output
India's key infrastructure-linked industries in April showed a sharp deceleration, with their output rising just 0.5 per cent from a year ago, the commerce ministry said on Tuesday. At 0.5 per cent in April, the growth of the eight core sectors — coal, crude oil, natural gas, refinery products, fertilisers, steel, cement, and electricity — was not only well below 4.6 per cent in March, but was the lowest in eight months. Six out of eight sectors falter Vagaries of the base effect apart, there are real concerns about the weak infrastructure output growth. Of the eight sectors, the performance of six weakened in April compared to March, with refinery products faring the worst after their production was down 4.5 per cent, the poorest showing since November 2022. The two sectors which saw improved production rates did so only because what came before: natural gas output was up 0.4 per cent after a 12.7 per cent contraction in March, while production of coal rose by 3.5 per cent, up from a 1.6 per cent rise the previous month. Coal output is likely to slow down post June, once the monsoon sets in across parts of the country. 'Economic uncertainty' The bad start to the new financial year seems to have been partially driven by the 'unprecedented economic uncertainty' caused by the US' 'tariff tantrums', according to Paras Jasrai, economist and associate director, India Ratings and Research. And while the reciprocal tariffs were put on hold on April 9, core sector growth – and industrial growth in general – still faces headwinds. Next week on May 28, the statistics ministry will release industrial production data for April. After edging up marginally to 3.0 per cent in March, industrial growth may have more than halved last month, going by the performance of the eight core sectors which make up 40 per cent of the Index of Industrial Production. According to Teresa John, deputy head of research and economist at Nirmal Bang Institutional Equities, IIP growth could be as low as 0.1 per cent in April, which would also be an eight-month low. Other datasets To be sure, core sector data isn't the only number that is suggestive of weakness in factory output last month. For instance, power generation in April was down 1.8 per cent from a year ago, with lower-than-normal temperatures bringing down daily power generation by 2.5 per cent year-on-year as of May 19, Jasrai of India Ratings and Research pointed out. On the other hand, the government's capital expenditure should support certain sectors, such as cement. In April, cement production was up 6.7 per cent, as per this week's core sector data.
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Business Standard
20-05-2025
- Business
- Business Standard
India's core sector growth plunges to eight-month low of 0.5% in April
Output growth in India's eight core infrastructure industries plummeted to an eight-month low of 0.5 per cent in April from an upwardly revised 4.6 per cent growth recorded in March, with three sectors contracting sharply, including refinery products and fertilisers, while electricity and natural gas clocked very feeble upticks. Base effects also pulled down last month's growth print, as the Index of Core Industries (ICI) had risen a sharp 6.9 per cent in April 2024, which was the joint highest in the past thirteen months. Cement production grew at the fastest pace among the core sectors, rising 6.7 per cent in April, but this was almost half the pace recorded in March and the lowest uptick in six months. Steel output grew 3 per cent and electricity generation rose a mere 1 per cent, the slowest uptick in seven months for both sectors. Coal production rose at a three-month high pace of 3.5 per cent, while natural gas output grew for the first time in ten months, albeit by a fractional 0.4 per cent, according to data released by the Ministry of Commerce and Industry on Tuesday. Crude oil output (-2.8 per cent) contracted for the fourth consecutive month, that economists attributed to low global prices, while output in refinery products contracted for the first time in eight months, with a 4.5 per cent drop that marked the sharpest downturn since November 2022. The eight core sectors constitute 40.27 per cent of the Index of Industrial Production (IIP), which had recorded a mild recovery to rise 3 per cent in March. Economists now expect industrial output growth to drop to around 1 per cent in April. 'The impact of Tariff Tantrums-led unprecedented economic uncertainty along with a high base effect pulled the infrastructure output growth down to be the lowest since August 2024, with six of eight sectors seeing a moderation in growth,' said Paras Jasrai, Associate Director at India Ratings and Research. Jasrai said he expects IIP growth in the range of one to two per cent in April, and core sectors' growth to improve to around 2 per cent in May. Terming the ICI print for April 'quite disappointing', Bank of Baroda chief economist Madan Sabnavis reckoned that IIP growth will be in the range of 1 per cent to 1.5 per cent for last month. Rating agency ICRA said IIP growth could moderate sharply to just around 1 per cent in April, citing the tepid core output numbers and other available high frequency indicators. 'The healthy growth in non-oil exports may provide an upside, unless the same represents round-tripping of some imports,' the firm's chief economist Aditi Nayar noted.
