Riding on a strong resurgence in manufacturing, the country’s factory output growth closed on a strong note at 5.8 per cent in 2023-24, higher than the 5.2 per cent growth recorded in 2022-23. 

The Index of Industrial Production(IIP) for March 2024 grew 4.9 per cent, much higher than the 1.9 per cent level recorded in same month last year. However, the latest IIP print was lower than the 5.70 per cent print recorded in February 2024, official data released on Friday showed.

Manufacturing sector output growth hit a five-month high in March 2024 at 5.2 per cent, lifting the overall growth performance for this segment in the entire fiscal 2023-24 to 5.5 per cent.

While Mining sector remained sluggish with growth in March 2024 at 1.2 per cent (6.8 per cent in March 2023), the electricity generation for the month under review grew 8.6 per cent (-1.6 per cent).

For the entire fiscal 2023-24, manufacturing, mining and electricity sectors grew 5.5 per cent (4.7 per cent in 2022-23), 7.5 per cent (5.8 per cent) and 7.1 per cent (8.9 per cent), respectively, data released by Ministry of Statistics & Programme Implementation showed. 


In March 2024, there was a strong showing by both consumer non-durables as well as consumer durables with growth rates of 4.9 per cent (-1.9 per cent) and 9.5 per cent (8.0 per cent) respectively. 

Construction goods, primary goods and capital goods recorded growth decline in March 2024 at 6.9 per cent (7.2 per cent); 6.1 per cent (10 per cent) and 2.5 per cent (3.3 per cent) respectively.

Madan Sabnavis, Chief Economist, Bank of Baroda said, that Consumer goods have shown a revival buttressing the feeling of consumption picking up towards the yearend. “Both durable and non-durables have done well. This should be sustained as rabi crop is expected to be good and along with wedding season should fuel spending in April and May”, he said.

For the entire fiscal 2023-24, consumer non-durables recorded growth of 4 per cent (0.7 per cent), and consumer non-durables grew 3.6 per cent (0.6 per cent).

Construction goods and intermediate goods saw growth of 9.6 per cent (8.4 per cent) and 5.2 per cent (3.8 per cent), respectively in 2023-24.

However capital goods growth nearly halved in 2023-24 at 6.2 per cent (13.1 per cent). Primary goods output growth too declined to 6 per cent (7.5 per cent).

Aditi Nayar, Chief Economist and Head - Research & Outreach, ICRA said that the IIP growth posted an expected dip to 4.9 per cent in March 2024 from 5.6 per cent in February 2024, as the leap-year effect faded. “The IIP growth was led by a robust expansion in electricity, with demand boosted by rising temperatures, and dampened by a feeble rise in mining output. Encouragingly, manufacturing growth rose to a five month high, albeit on a very low base”, Nayar said.

While the growth of consumer durables remained elevated at 9.5 per cent in March 2024, outpacing the other categories, this performance was on a low base (-8% in March 2023), she added.

Dharmakirti Joshi, Chief Economist, CRISIL Ltd, said that IIP slowed to 4.9 per cent on-year in March 2024 compared with 5.6% in February 2024.

“Growth averaged 4.9 percent in the fourth quarter, compared with 6.2 per cent in the third, which is likely to contribute to a slowdown in gross domestic product (GDP). The data on this is due by the end of May”, Joshi said.

“…, we expect gross domestic product (GDP) growth to moderate to 6.8 percent in fiscal 2025 over 7.6 per cent estimated for past year”.

Joshi said that the slowdown in March 2024 was driven by infrastructure and construction goods, reflecting moderating government capital expenditure at the end of the fiscal, Joshi added.

Among consumer products, while durables slowed, non-durables revived this month, hinting at a moderation in urban demand and a revival in rural demand, he said.