Industrial Growth Slows to 3.8% in January 2024

The Index of Industrial Production (IIP) for January 2024 reflects a growth rate of 3.8%, indicating a slowdown compared to December 2023. The data, released with a six-week lag, provides insights into the performance of various sectors within the industrial landscape of India.

Manufacturing Sector’s Deceleration

• The manufacturing sector, a significant contributor to industrial output, witnessed a deceleration in growth, dropping from 4.5% in December 2023 to 3.2% in January 2024.
• Manufacturing, constituting around 15% of Gross Value Added (GVA), holds a pivotal role in job creation and indirect tax revenue generation.

Economists’ Optimism Amidst Slower Growth

• Despite the overall slowdown, economists maintain optimism, noting that all use-based segments’ output levels have surpassed the pre-Covid levels (February 2020) after 33 months.
• In January 2024, factory output stands at 14% higher than the pre-Covid level, with 13 industries showing production levels exceeding those of the pre-Covid period.

Revision of Previous Data

• Alongside the January 2024 estimates, revisions for December 2023 (first revision) and October 2023 (final revision) have been conducted based on updated data from source agencies, with response rates ranging from 93% to 95%.