India’s industrial output growth held up better than expected in April despite multiple disruptions, and that resilience rather than the headline number itself is the key takeaway from the first reading of the revamped Index of Industrial Production (IIP), according to Prof. Mridul Saggar, former Executive Director of the Reserve Bank of India and Professor at IIM Kozhikode.Speaking to CNBC-TV18 after the release of the April IIP data, Saggar said the economy had managed to withstand significant shocks, including energy-related disruptions and supply bottlenecks.
“I’m glad growth is holding up against this extreme shock. That’s how one has to view the data,” Saggar said.
India’s industrial output expanded 4.9% in April 2026, driven largely by manufacturing, as the government released the first reading of the revamped IIP series with FY23 as the new base year. The Ministry of Statistics and Programme Implementation (MoSPI) revised the base year from 2011-12 to 2022-23 to better reflect the present structure of the economy, with a refreshed product basket, revised weights and wider sectoral coverage.Under the new series, the IIP stood at 118.9 in April 2026, compared with 113.1 a year earlier. Manufacturing, which carries the highest weight in the index, grew 6.2% year-on-year, while electricity and gas supply rose 4.9%. Water supply, sewerage and waste management, a newly added category, increased 6.6%. Mining and quarrying contracted 5.1%.Saggar cautioned against placing too much emphasis on month-on-month, or even headline year-on-year, comparisons in the early stages of the new series. Instead, he argued that the composition of growth offers more meaningful insights.“We need not give too much importance to month-on-month variations. Rather, we should look at the internals thereof and see where the growth is improving and what needs to be put right,” he said.He noted that the revamped methodology introduced several structural improvements, including the addition of gas supply and waste management categories, revised use-based classifications and updated weights. The series also allows for factory substitution to better capture shifts in industrial production patterns.“What happens is there is creative destruction in industry,” Saggar said, explaining the need to replace factories and product lines that cease production over time. He added that India would gradually move towards chain-based methods that better reflect emerging production lines and evolving industrial activity.Senior economist at HDFC Bank, Sakshi Gupta, also pointed to the sectoral details rather than the aggregate figure as the more important signal from the data release.Electricity production, particularly renewables, emerged as a bright spot. Gupta said renewable electricity generation appeared to be recording double-digit growth, reflecting trends already visible in core sector data.“One thing that is standing out is electricity production growth,” Gupta said, adding that renewable production growth appeared to be “close to about 16% or 18%”.Gupta said manufacturing growth of 6.2% was stronger than expected given the difficult operating environment during April, when energy disruptions and shortages affected several industries.“I would have anticipated these numbers to be much worse, given the extent of the energy shock that we continued to face in the month of April,” she said.Market expectations had been subdued ahead of the release, with a Cogencis poll pegging April IIP growth under the old series at 3.7%. Against that backdrop, the 4.9% reading under the new series suggests industrial activity remained relatively resilient, although growth was slower than the 5.7% pace recorded in April last year.Also Read | India’s industrial output grows 4.9% in April as revamped IIP series debutsWithin manufacturing, 17 of the 23 industry groups recorded positive growth. The strongest performers included manufacture of electrical equipment, which rose 19.2%, other transport equipment at 18.9%, textiles at 15.6%, machinery and equipment at 12.9%, and motor vehicles, trailers and semi-trailers at 12.7%.At the same time, weakness in mining remained a drag on overall industrial performance. Gupta said the contraction reflected trends already visible in core sector data, particularly weaker output in coal, natural gas and crude oil.For Saggar, however, the broader significance of the data lies not merely in whether April’s growth rate was higher or lower than a year ago, but in the improved measurement framework itself and the economy’s ability to absorb shocks while maintaining industrial momentum.
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