Growth Pangs: On Industrial Activity

At 4%, India’s financial 2025 industrial production average (IIP) is average The lowest in the last four yearsTo mark the recession in industrial activity. This can be attributed to uncertainties in the global economic outlook, which is low for increase in tapid goods exports, increase in demand for expected consumption and decline in private capital expenditure. While the monthly barometer of industrial production of the nation, IIP, in March from 2.7% to 3% of February, it has been mainly due to an increase in power generation, which is cyclicly on peaks in summer. Power generation growth between February (3.6%) and March (6.3%) was almost doubled. But the decline in IIP, from 5.9% (2023–24) to 4% (2024–25), looks closely on areas that have lagged behind. While mining has declined from 7.5% (FY24) to 2.9% (FY25), after manufacturing 5.5% (FY24) and 4% (FY25) and power 7% (FY24) and 5.1% (FY25). What is the decline of -1.6% in Finance 25 seen in consumer non -durables in the previous year. It is almost double, with urban private consumption increase with almost double the possibility of consumers for the possibility of 8% (FY25) from 3.6% (FY24), it indicates an increase in urban private consumption, while in the quarter of October to December there is a reducing rural consumption to reduce the effects of high food inflation. Certainly, retail inflation was the lowest in six years at 4.6% in FY25, assisting from steep fall in vegetable prices in the last quarter, but affected farm income, affecting the income of the farm, further affecting the rural consumption. While in January from 6.5% to April, RBI’s bank lending rate has reduced capex lending rates in banks, there is no possibility of encouraging private sector to increase investment in an uncertain economic and business environment, without adequate domestic consumption from the government.

Flat growth in goods exports in FY25 is another sector that should worry about policy makers as it indicates considerable stress on the huge small businesses of India, MSME region, which contributes about 45.8% to exports. The region has seen a significant increase in the last five years, in FY1 21, from about ₹ 4 lakh crore to FY 25, it ranges from more than ₹ 12 lakh crore. However, given the country’s largest trading partner, the United States, stressful trade relations with India, it should ensure that the bilateral trade agreement that is under negotiation strengthens about 60 million MSMEs in India, most of which have been classified as micro industries. As a result, it will protect more than 250 million jobs that provide sectors.