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31 July 2026

Growth in Index of Industrial Production

The Index of Industrial Production (IIP) is a key macroeconomic indicator frequently cited in UPSC Mains to analyze industrial performance, growth trends, and sectoral health.

1 min read Day 11 of 15 2 questions 1 prelims

Notes

  • Index of Industrial Production (IIP) recorded a 23-month high growth rate of 7.3% in June 2026.
  • Manufacturing sector growth was driven by both domestic and external demand.
  • Consumer durables sector maintained growth above 7% for two consecutive months; non-durables reached a six-month high.
  • Merchandise exports grew by 15.5% in June 2026, according to the Commerce Ministry.
  • Capital goods sector achieved double-digit growth, a trend observed in eight of the last 10 months.
  • Electricity sector growth hit a 25-month high, attributed to increased demand during a heat wave.
  • Mining sector returned to growth in June after four months of contraction, though this is expected to be temporary due to monsoon disruptions.
  • Economic risks include potential rural demand slump due to monsoon deficiency, volatility in oil prices linked to the West Asia crisis, and uncertainty in external trade environments.
  • Government capital expenditure remains the primary consistent engine of industrial growth in the post-pandemic period.

Part of a longer story

This is day 11 of 15 in Upgrades to India's statistical databases, which has been running since 21 June 2026. Reading it whole is usually worth more than reading today alone — the exam asks how something developed.

Questions

  1. Analyze the role of government capital expenditure as a primary driver of industrial growth in India in the post-pandemic era. What are the associated risks of over-reliance on this engine? 150 words
    Attempt this — 150 words in 8 min
    0 / 150 words 8:00
  2. The Index of Industrial Production (IIP) often reflects the broader economic resilience of the country. Discuss the structural challenges and external headwinds that currently threaten the sustainability of India's industrial growth trajectory. 250 words
    Attempt this — 250 words in 11 min
    0 / 250 words 11:00

Prelims

  1. Which of the following sectors is identified as having shown consistent double-digit growth in eight out of the last 10 months according to recent IIP data?