The article published in the editorial section of The Hindu Newspaper talks about the slowdown in factory production due to the monsoon and its impact on the economy. The article also raises concerns regarding other factors affecting the economy such as less consumer and government spending.
In August, heavy rains in India caused a slowdown in factory production. This was the first time production dropped since October 2022. The outlook for September doesn’t look good either, as the monsoon season ended later than usual, affecting things like electricity demand.
In September, production from eight key industries fell by 0.8% compared to August. However, it was still 2% higher than in September of the previous year. These eight sectors are very important because they make up about 40% of all industrial production in India. In August, these sectors experienced a decline of 1.6%, which was concerning since it was the first decline in over three years.
Looking at the growth for the first half of the financial year, these industries grew by only 4.2%. This is much lower than the 8.2% growth they had during the same period last year. Additionally, the overall growth rate was also lower than the previous year’s 7.6%. Since May, production levels in these key sectors have been consistently falling. By September, production was 8% less than it was in May.
There is also growing concern about consumer spending, especially in cities. People are buying fewer durable goods like cars and everyday items. This trend was evident in the weak sales results from many fast-moving consumer goods companies in the second quarter. Although spending in rural areas is improving due to better rains, urban spending is dropping, which could hurt India’s overall economic growth.
Furthermore, government spending on public infrastructure projects has decreased by 15% this year. While there was a spike in spending after the recent elections, this increased spending slowed down again in August and September. This decline in spending can hurt sectors like steel, which relies heavily on construction projects.
While there may be a slight recovery in private investments, the government needs to boost its spending to keep the economy growing. The government has set a target of spending ₹11.11 lakh crore on infrastructure this year. It needs to increase this spending to achieve its goal. Doing so is crucial to maintain economic growth and prevent concerns about the country entering a deeper economic slowdown.
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The Editorial Page of The Hindu is an essential reading for all the students aspiring for UPSC, SSC, PCS, Judiciary etc or any other competitive government exams.
This may also be useful for exams like CUET UG and CUET PG, GATE, GMAT, GRE AND CAT
To read this article in Hindi –https://bhaarat.hellostudent.co.in/