Why has Industrial Production dipped recently in the month of February in India?

 Why is it in the news? 

1. The index of industrial production grew at its slowest rate in six months, clocking a pace of 2.9% in February, thereby decelerating growth across all sectors according to data from the Ministry of Statics and Programme implementation. 

2.A combination of high base effects along with a slowing growth and manufacturing sectors led to the growth falling in the month of February 2025. Mining sector growth slowed to 1.6% in February as against 8.1% in the same month of the previous year. Manufacturing sector grew at a pace of 2.9% as against 4.9% in the previous year. Electricity production dipped to 3.6% in the month of February 2025 against 7.6%  last year. 

3. As per use based classification, capital goods output grew the fastest at 8.2% in the month of February 2025 against the 1.7% in the corresponding month in 2024. All other goods categories registered a slower output growth in February 2025 compared to the corresponding month last year. Intermediate goods output grew the slowest at 1.5%, consumer non durable at 2.1% against 3.2% the last year.  

4. ​In February 2025, India's consumer durables sector experienced a year-on-year growth of 3.8%, marking a significant slowdown compared to the 12.6% growth recorded in February 2024.

The deceleration in consumer durables growth reflects challenges such as subdued urban demand and global economic uncertainties. However, the resilience in capital and infrastructure goods points to ongoing investment momentum, potentially offsetting some consumption weaknesses.​

What is the index of industrial production? How is it calculated?

1. The index of industrial production is a monthly economic indicator published by the National Statistical Office to measure the short term changes in the volume of production of selected industrial sectors in India. It is a key measure to track industrial activity and is often used by policy makers, economists and analysts.   

2. IIP includes three major sectors : These are manufacturing, having a weightage of 77.6%, mining 14.4% and electricity 8.0%. 

3. IIP is also classified by use based sectors like primary goods, capital goods, intermediate goods, infrastructure/construction goods, consumer durables and consumer non-durables. 

4. To calculate IIP, the base year is 2011-12. The formula for IIP is IIP=∑(Wi​×Ri​)​ / ∑Wi​

Where:

Wi = Weight of i-th product.

Ri = Production index of i-th item = Current production / base year production * by 100. 

Sector	Weight	Base year Production	Current Production	Ri
Manufacturing	77.6	100 units	110 units	110
Mining	14.4	100 units	90 units	90
Electricity	8.0	100 units	105 units	105

IIP = ( 77.6 * 110) + (14.4 * 90) + (8.0 * 105) 

77.6 + 14.4 + 8.0

   =  8536 + 1296 + 840 

100

= 10672/100 = 106.72 

So the IIP would be an increase of 6.72% in industrial production compared to the base year. Thus, IIP is a crucial indicator of India’s industrial performance and provides valuable insights for policy formulation. However, being a volume index, it does not reflect price changes or productivity improvements. 

Why has industrial production dipped recently in India?

1. The industrial production in India has experienced a severe slowdown in the month of february 2025 at 2.9% YoY basis falling short of the anticipated 4% growth. There were several factors for the poor growth of the industrial sector. These are : 

• weak domestic demand - Consumer demand in rural areas has been sluggish because of the stagnant wage growth and high borrowing cost. This led to the low spending on consumer goods leading to the lower production of consumer durables and non-durables. 

• Global economic headwinds - The slow down in the global demand has adversely affected India’s export of textiles, pharmaceuticals and electrical equipment. The declines in export, in turn , led to the contraction in the output of manufacturing goods. 

• Under performance of production linked schemes - India’s $23 billion production linked scheme aimed at boosting domestic manufacturing has underperformed. Only a fraction of the allocated funds has been disbursed. Thus, the scheme has failed to meet production targets. 

• Adverse weather conditions - Excessive rainfall in August 2024, disrupted mining activities, thereby, contributing a contraction in the mining sector and affecting overall industrial output. 

• High interest rates - The policy of the Reserve Bank to hike interest rates to combat inflation have increased borrowing cost, leading to reduced consumer spending and lower corporate investments. 

How can the growth in industrial production be increased?

1. Boost domestic demand by lowering interest rates to encourage consumption and investment. That's why the RBI has reduced the Repo Rate from 6.25% to 6% to enhance consumption demand. Secondly, there is a need to enhance rural income through MGNREGA , MSP rationalisation , rural infrastructure  and enhanced amounts under PM-Kisan. There is also a need to give tax incentives so that people may purchase durable as well as non durable goods. 

2. Strengthening of manufacturing ecosystem should be resorted to by revamping PLI scheme, ease of doing business, ease compliance burden of MSMEs through digital single window system and adopting cluster based development sectors like textiles, electronics and pharmaceuticals. 

3. Improving infrastructure by accelerating projects under PM Gati Shakti, providing continued power supply for industrial clusters and industrial corridor development. 

4. Increasing export competitiveness by reducing logistic costs from 14% of GDP in India to 8% of GDP like in China, making headway by signing free trade agreements with different countries of the world  for having wider access to the global market and incentivising high value exports over raw materials/ traditional items. 

5.  Innovating and skilling through expansion of skill India Mission with a focus on AI, Robotics, Electronics and Green tech, strengthening research and development through public and private partnership and establishing innovation clusters like IITs and IIITs. 

6. Disposal of litigation through fast track courts and acquisition of land within the time limit. 

Government Efforts 

1. The Government made several provisions for the improvement in the industrial production in India in the Union Budget 2025-26. This includes the launching of a National Manufacturing mission with a focus on cluster based development, support for MSME and start up by providing loans up to 2 crores to 5 lakh first time entrepreneurs for women SC and ST categories. 

The budget further revised the classification norms for MSMEs for better access to beneficiaries. The budget also allocated 1.5 lakh crore interest free 50 year loans to interest for capital expenditure. It also provided for the expansion of PM Gati Shakti for better logistics and industrial connectivity. It further created a 25 thousand crore maritime development fund to support ship building. 

It also increased allocation for research and development and innovation hub under start up and digital India. It also pushed for adoption of industries 4.0 technologies like Ai, IOT and automation in industrial processes. 

2.The budget further rationalised custom duties on critical raw materials to reduce input costs. 

Conclusion

The Union Budget 2025-26 reflects a strategic push towards strengthening India’s industrial base through support to MSMEs, infrastructure expansion and sector specific initiatives. 

To boost industrial production in India, a multi pronged strategy is essential. While there is a need to improve infrastructure, simplify regulation, enhance skill development, support MSMEs and promote technology adoption, there is further need to have coordinated efforts from the government, industry and financial institutions so that India can unlock its manufacturing potential and emerge as a competitive global industrial hub. 

The Discretionary power of the Governor of a state in India.

Why is it in the news? 

1. The Supreme Court on 8th April 2025 delivered a landmark judgement. It termed the conduct of the Governor of Tamil Nadu as unconstitutional. The Court exercised article 142 to bring complete justice and thus, it deemed the ten pending bills to have received the assent, declaring the actions of the President of India who assented to only one of the bills, rejecting seven and not considering two other bills - to be void. Thus, the court ruled that the conduct of the Governor to send ten pending bills which had been re-passed by the state legislative assembly  to the President for reconsideration was completely unconstitutional. 

2. The court set the time limits of one to three months for Governors to take action on future bills. Under article 200 of the constitution, the Governor has three choices. These are to give assent to the bill passed by the state legislature, secondly, to withhold the bill and thirdly,  to reserve the bill for consideration for the President. The court ruled that a Governor has a maximum of one month to withhold assent on the aid and advice of the state cabinet. The court further stated that a maximum of three months is given to return the bill with a message specifying reasons if the Governor withholds assent contrary to the cabinet’s advice. It held that the Governor has three months to reserve a bill for the President’s consideration against the advice of the cabinet. It further held that the Governor must grant assent to a bill repassed by the state legislature under article 200 within a maximum of one month. The court further warned that any failure by a Governor to comply with the timelines would invite judicial review. The court emphasises that Governors have no such absolute or pocket veto. Further a Governor cannot exercise his personal discretion if a house passes the same bill again and returns to him for consent. The top court declared that the Governor’s conduct was arbitrary, non-est (non- existent) and erroneous in law. 

3. The Supreme Court held that a Governor cannot reserve a bill for the President's consideration when the proposed law, which was earlier rejected by him, is presented for the second time by the state legislature.

4. The Court observed that actions of the Governor which impede the will of the people reneges on the constitutional oath of office.  The Governor as the constitutional head of the state is obliged to accord primacy to the will and welfare of the people of the state and earnestly work in harmony with the state machinery. 

5. Thus, the judgement on 8th April by the Supreme Court led to the ending of the pocket veto of the Governor, strengthening the spirit of federalism, and setting the precedent for the resolution of the disputes between the Governors and State Governments. Further, the courts can intervene decisively and review the action of the Governors under article 142 hence forward. 

   

The difference between the positions of the President of India and the Governor of a State. 

1. The President is the constitutional head of the country while a Governor is the constitutional head of a state. 

2. After the 42nd amendment, the President is bound to accept the advice of the Council of Ministers. He can send back the advice of the council of Ministers for reconsideration once. However, after the council of Ministers reconsiders and resubmits its advice, the President must act in accordance with that advice, leaving no room for further discretion. Thus, the executive power of the Union is vested in the elected Government of the day. The President is merely the titular and ceremonial head of the country. 

3. In contrast, article 163 allows Governors to act in their discretion in certain situations required by the constitution. If any question arises whether any matter is or is not a matter as respects which the Governor is by or under the constitution required to act in his discretion, the decision of the Governor in his discretion shall be final. 

What are the discretionary powers of the Governor of a State?

1. The Governor can reserve a bill passed by the state legislature to the President of India. 

2. He can send a report to the President recommending President’s rule under article 356 if he is satisfied that the constitutional machinery of the state has broken down. 

3. If no parties get a clear majority, the Governor can use his discretion in selecting the Chief Minister who is most likely to command a majority in the State Legislative Assembly. 

4. If the Council of Ministers loses majority in the State Assembly and refuses to resign, the Governor can dismiss the Government. 

5. The Governor can recommend dissolution if no party is in a position to form a stable Government. 

6. The Governor can send back  the bill passed by the State Legislature for reconsideration. But if that bill is passed with or without amendments and sent to the Governor, he has no choice but to give assent to that bill.

7. The Governor of a state is required by the constitution to exercise the functions in his discretions are : 

• The Governor of Assam shall, in his discretion, determine the amount payable by the State of Assam to the district council as royalty accruing from licenses for minerals. 

• Under article 239 (2), a Governor can be appointed as an administration of an adjoining Union Territory and in the capacity of the administrator, he will function independently of his Council of Minister.   

• The Governor has special responsibility with regard to certain matters. Though he is to consult his council of Ministers, the final decision shall be in his individual judgement which no court can question. 

• Under 371 (2), the Governor of Maharashtra and Gujarat have the special responsibility for taking steps for the development of Vidarbha and Saurashtra. 

• Under article 371 A, the Governor of Nagaland has special responsibility with regard to law and order in that State. 

• Under article 371 C, the Governor of Manipur has the special responsibility to secure the proper functioning of the committee of state assembly consisting of the members elected from the hilly areas. 

• Under article 371 F, The Governor of Sikkim has special responsibility to ensure social and economic advancement of different sections of the population of Sikkim. 

• Under article 371 H, the Governor of Arunachal Pradesh has special responsibility with respect to law and order and the decision in this regard by the Governor shall be final. 

• Under article 371 J , the Governor of Karnataka has the special responsibility for the establishment of a separate development board for Hyderabad Karnataka region. He will also ensure equitable opportunities and facilities for the people belonging to the said region in matters of public employment, education and vocational training. 

The Governor has to oversee the functioning of the tribal councils of Assam, Meghalaya, Mizoram and Tripura. He has to ensure that these tribal councils discharge their functions effectively and efficiently. 

Similarly, the Governor has special responsibility with regard to areas under the Fifth schedule of our constitution. He has to ensure that the tribal councils operating in the Fifth Schedule area are discharging their functions efficiently. 

Different judgements of the Supreme Court with regard to discretionary power of the Governor

1. In S R Bommai vs Union of India (1994), the Supreme Court held that the floor test in the assembly is the best way to determine majority. Whether a party enjoys a majority in the legislative assembly will be determined on the floor of the House. It should not be based upon the subjective satisfaction of the Governor. 

2. Similarly it held that the report of the Governor to the President for the imposition of the President rule is subject to judicial review. 

3.In the Rameshwar Prasad vs Union of India (2006), the Supreme Court held the dissolution of Bihar Assembly unconstitutional, It held that the Governor acted without verifying if a party could form Government. Thus, the actions of the Governor are subject to judicial review. 

4. In the case of Nabam Rebia vs Deputy Speaker (2016), the Supreme Court held that the Governor cannot act on his own to summon, prorogue or dissolve assembly. Actions of the Governor must be based on aid and advice of the council of Ministers. 

5. In the case of Shamsher Singh vs State of Punjab, the Supreme Court held that the Governor is bound by aid and advice of the council of Ministers, discretion of the Governor is very much limited and this should be used only where the constitution specifically allows him.

The present position of the Governor

1. Governors are now primarily bound by the advice of the Council of Ministers with having limited discretionary powers. Moreover, these discretionary powers are subject to strict judicial review. In the case of the State of Tamil Nadu vs the Governor of Tamil Nadu 2025, the Supreme Court restricted discretion in reserving re-enacted bills. 

2. He is expected to act as an impartial constitutional head and not as a partition agent. 

3. The Governor should respect the State Government’s authority while acting as a link between the state and the Union Government. He should not do anything which would subvert the federal spirit in our country. 

What is the Rule of Law? How can the Rule of Law be strengthened in India?

 Why is it in the news?

1. The Chief Justice of India said that there is a complete breakdown of Rule of Law in Uttar Pradesh. 

2. Everyday civil suits are being converted to criminal cases. This is absurd. Disputes over civil issues cannot be turned into criminal offences. It was contended that registration of criminal cases in civil disputes is resorted to reach a speedy resolution as civil disputes took a long time. The Supreme Court also castigated the working of police investigation.  

What is the Rule of Law?

1. The Rule of Law is a fundamental principle of governance in a democracy. It means that law should govern a nation instead of arbitrary decisions of government officials. According to Dicey, there are three elements of the Rule of Law. These are : 

• Supremacy of law - It means that nobody is above law. Law is Supreme. People, irrespective of the status of the society, will have to obey the command of law. 

• Equality before the law - All individuals, irrespective of the status in the society, are equal before the law. 

• Predominance of legal spirit - Individual rights and liberties arise from judicial precedent and constitutional guarantees, not from arbitrary state decreases, thereby emphasizing courts as guardians of justice. 

2. In addition, the Rule of Law has the following features. These are : 

• Non- arbitrariness - The Rule of Law secures that government actions are based upon established laws rather than the whims of individuals in power. Thus, it prevents despotism and authoritarianism. 

• Legal constraints on power - The government and its officials are subject to existing laws just as citizens are. Thus, the principle ensures that rulers must adhere to legal constraints. They cannot act outside the law.  

• Impartial application - Laws must be applied impartially across similar cases without consideration of the class, status or power of the individuals, thereby, ensuring fairness in legal proceedings. 

• Universal application of law - Laws should be open, comprehensible to all and universally applicable. Legal obligations should not be retroactively established. 

• Separation of powers - It ensures judicial independence and prevention of interference in legal proceedings by the executives and legislatures, thereby, guaranteeing fair administration of justice and protection of individuals against arbitrary governance. 

• Protection of Fundamental Rights - the Rule of Law ensures protection of fundamental human rights, thereby, ensuring freedom of individuals against infringement of rights.  

• Fair and Public trial - Legal proceedings should be conducted fairly, transparently and publicly. This principle ensures that justice is not only done but is seen to be done, thereby, maintaining public confidence in the legal system. 

• Accountability - Both Government officials and private individuals are accountable under the law. This principle ensures that those empowered are held responsible for their actions and that legal remedies are available for abuses of power. 

Provisions of the Rule of Law in the Indian Constitution

1. Our constitution embodies the principle of Law. It ensures that all citizens are equal before the law and the Government operates within the legal framework to prevent arbitrary use of power. There are several provisions which guarantee the Rule of Law. These are : 

• Fundamental Rights - Under Part III of our constitution, fundamental rights have been bestowed upon the people of India. These Rights include Right to equality (Article 14 to 18), the Right to freedom (Article 19-22) and the Right to constitutional remedies (Article 32). These Rights are meant to protect individuals from the arbitrariness of the state. 

• Separation of Powers - Our constitution establishes a system of checks and balances among three branches of Government. This separation ensures that no single branch can dominate,thereby, upholding the Rule of Law. It ensures that the constitution is Supreme. That all powers emanate from the constitution. If any branch exceeds its limits, the other branch puts a break upon it. For example, if the Parliament in India makes a law which contravenes the provisions of the constitution, the judiciary would declare that law null and void. Article 50 provides for separation of judiciary from the executive. 

• Independent judiciary - The Judiciary in India is independent and has the power of judicial review. This allows the Supreme Court and High Courts to interpret the constitution and Fundamental rights. To safeguard the independence of the judiciary, adequate provisions have been made for the security of the tenure of the judges like stiff procedure of impeachment. Salaries and allowances are charged upon the consolidated fund of India and therefore, not votable in the Parliament. Similarly, salaries and allowances of judges cannot be varied to their disadvantages during their tenure in offices. 

• Legal framework and accountability - Our constitution provides a legal framework for governance. For example, under the seventh schedule of our constitution, the executive and legislative powers have been clearly defined by the Union and state Governments.  Similarly, constitutional bodies like Election Commission, Comptroller and Auditor General of India, SC/ST Commission have been assigned specific tasks and made accountable. 

  

What challenges does the Rule of Law face in India today? 

1. Judicial backlog - The Indian Judiciary is overburdened with a massive backlog of cases leading to delayed justice. Over 50 million pending cases including 77,000 in the Supreme Court and 6 million in High Courts are in India as per the data available in 2025. Justice delayed is justice denied, thereby eroding the confidence of the people in the legal system and the weakening of Rule of Law in India . 

2. Corruption - Corruption within various levels of government and law enforcement can impede the application of rule of law. It leads to favoritism and inability to enforce law uniformly. India ranks 93rd in the Corruption Perception Index (2023) issued by an institution called transparency international. It was also reported that 47% of citizens give bribes for their work. 

3. Social inequality - Deep rooted social inequality in our society supported by caste based discrimination and gender inequality further hinder the equitable application of the rule of law. These inequalities result in differential treatment before the law.  

4. Unequal access to justice - People from marginalised communities face difficulties in accessing legal resources and representation. Economic disparities prevent people from effectively navigating the legal system. The National Legal Services Authority (Nalsa) serves only 15%i of eligible beneficiaries due to paucity of funding and awareness gaps. 

5. Police reforms - Police force is often criticised for being overburdened and sometimes involved in human right violations, custodial deaths and fake encounters. It is also alleged that law enforcement agencies misuse laws like unlawful activities prevention Act (UAPA) with a 3% conviction rate but thousands of detained people languish in jails for years. The Government has failed to implement police reforms as per the judgement of the Supreme Court in the case of Prakash Singh vs Union of India (2006). 

6. Political influence - Political interference in the functioning of police and judiciary, sometimes leads to biased law enforcement and judicial decisions based on political consideration rather than the legal merits of cases. 

7. Legislative overreach - Parliament sometimes passes laws hastily without adequate debate or consideration of long term implications. These legislations infringe upon individual rights. For example, the Government had to withdraw three farm laws under the pressure of farmer unions. 

8. Political and communal divisions in the Society - On account of electoral politics in India, several parties sprang up on communal and cast lines to appease their community or fellow caste brethren. This kind of polarisation challenges the democratic principles and the Rule of Law. 

Thus, the status of Rule of Law in India is poor when compared with the developed countries of the world. The Rule of law index of India was 79th in the world. 

How to strengthen the Rule of Law in India ?

1. Increase judicial capacity - Raise the number of judges to population to 50 per million instead of the present 21 per million. Efforts should be made to fill vacancies in High Courts. 

2. Establishment of more fast track courts for speedy delivery of justice involving marginalised sections of the society. 

3. Ensuring judicial independence

4. Implementing comprehensive police reform to make the police working more transparent and accountable

5. Increasing public legal literacy through awareness campaigns

6. Expanding legal aid services to ensure that marginalised communities have access to legal recourse. 

7. Reviewing and updating laws to reflect contemporary societal needs. 

8. Strengthening institutions like National Human Rights Commission and State Police Complaint Authorities to put a break upon arbitrary arrest and custodial deaths. 

9.Leveraging technology by expanding E-courts to reduce pendency of cases. 

10. Mandatory independent judicial inquiries for encounter deaths and custodial torture.

12. Transparent appointments of judges through collegium system. 

Conclusion

1.  Strengthening the Rule of Law in India is crucial for ensuring justice, equality and democracy. 

2. Indian Democracy will not survive without the strong pillar of Rule of Law. 

3. By implementing judicial and police reforms, the rule of law can be enforced effectively, thereby instilling confidence among the people in the existing institutions. 

4. Our constitution has safeguarded the Rule of Law through article 14, 21 and 32. Our constitution ensures Supremacy, Equality and Judicial guardianship.