IAS/UPSC Coaching Institute  

30 Oct 2025 : Uneven growth

 Editorial 1: ​​​​Uneven growth

Context

Enhancing household incomes and expanding employment opportunities are essential to revitalise domestic demand.

 

Introduction

The latest industrial production data for September 2025 offers a crucial snapshot of India’s economic pulse. While the quarterly trend shows signs of recovery, the half-yearly performance remains the weakest in five years. The figures highlight both resilience in select manufacturing segments and continuing weaknesses in mining and consumer demand—underscoring the need for sustained, broad-based industrial revival.

 

Industrial Production: September 2025 Analysis

  • September’s IIP (Index of Industrial Production) data offers valuable insights into quarterly and half-yearly trends.
  • While the situation is not entirely bleak, there are several areas that need policy attention and corrective measures.

 

Overall Industrial Growth Trends

Period

Growth Rate

Observations

April–September 2025 (H1 FY25)

3%

Slowest half-yearly growth in at least five years; reflects structural weakness.

Q1 FY25 (Apr–Jun 2025)

2%

Weak start to the year; sluggish recovery momentum.

Q2 FY25 (Jul–Sep 2025)

4.1%

Noticeable improvement, signalling a short-term rebound in industrial activity.

Key takeaway:

  • The quarterly data shows mild recovery, but the half-yearly growth remains below desired levels.

Sectoral Performance

Manufacturing Sector

  • September growth: 4.8% — second highest this fiscal year.
  • Q2 FY25 growth: 4.9% — fastest since Dec 2023 quarter.
  • Half-yearly growth: 4.1%, improving from 3.8% in the same period last year.
  • However: Growth is not broad-based; concentrated in few sub-sectors.

Manufacturing Sub-Sectors (23 total)

Trend (Q2 FY25)

Remarks

Over half of sub-sectors

Contracted

Indicates narrow base of growth.

Labour-intensive sectors (Apparel, Leather, Rubber, Plastics)

Contracted

Negative signal for employment generation.

Capital-intensive sectors (Wood, Mineral, Basic Metals, Fabricated Metals)

Expanded

Growth driven more by investment than job creation.

Concern:

  • If such concentration persists, employment generation and inclusive growth could suffer.

Mining Sector

  • Contracted in September, Q2, and the entire H1 FY25.
  • Monsoon-related disruptions explain part of it, but the overall performance is unusually poor.
  • Strengthening this sector is vital for energy and strategic mineral security.

Consumer Non-Durables

  • Contracted for six consecutive quarters.
  • Includes essentials (salt, edible oils) and discretionary goods.
  • Causes: Weak consumer demand and base effects.
  • Implication: Reflects persistent demand slack; highlights need for income and job growth to revive consumption.

Policy Implications & Way Forward

  • Revive demand: Focus on raising household incomes and employment.
  • Diversify manufacturing growth: Encourage labour-intensive sectors through incentives and skill support.
  • Revitalise mining: Reduce weather vulnerability, ensure sustainable extraction.
  • Monitor consumption patterns: Non-durables contraction signals weak purchasing power.

 

Conclusion

India’s industrial landscape in H1 FY25 shows gradual recovery but deep structural imbalances. Manufacturing momentum hides uneven growth, mining remains fragile, and consumer demand weak. Sustainable improvement will require broad-based sectoral revival, job creation, and income expansion — ensuring that industrial growth translates into inclusive and durable economic progress.