GST rationalisation to augur well for manufacturing output in September-October

New Delhi, Sep 29 (IANS) The GST rationalisation is expected to boost consumption demand during the festive season, which is likely to augur well for manufacturing output in September-October 2025, once the older inventories are off the shelves, economists said on Monday.

The IIP growth was recorded at 4 per cent in August 2025. Mining output witnessed a year-on-year expansion after a gap of four months, and growth in electricity generation inched up to a 5-month high in the month.

“On the use-based side, the growth in primary goods output accelerated to a 7-month high of 5.2 per cent in August 2025, reflecting the trends in mining and electricity generation, even as all the other five sub-segments witnessed a deterioration in their growth performance vis-a-vis July 2025,” ICRA’s Chief Economist Aditi Nayar said.

The infrastructure and construction sector clocked a double-digit surge of 10.6 per cent in August compared with the same month of the previous year on the back of big-ticket government projects being implemented in the highways, railways and ports sectors.

Within the manufacturing sector, 10 out of 23 industry groups recorded a positive growth in August this year compared to the same month of the previous year.

On the investment front, infrastructure/construction goods continued to register a healthy growth, rising by 10.6 per cent. Public capex continues to drive the investment momentum, while private capex remains sluggish amid persistent global uncertainties.

“Consumption trends will remain a key monitorable, with GST reforms expected to provide a much-needed fillip to the demand scenario ahead of the festive season,” CareEdge Ratings’ Chief Economist Rajani Sinha said.

Additionally, income tax reductions, lower food inflation, and RBI rate cuts provide a supportive backdrop for consumption.

“In the midst of a challenging external environment, a revival in domestic demand aided by these factors can help spur private capex and support the overall IIP growth going forward,” Sinha added.

–IANS

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