What does the use-based classification of IIP reveal about the drivers of India's industrial growth? Explain the significance of the gap between consumer durables and non-durables.

The use-based classification groups IIP output by end use: primary, capital, intermediate, infrastructure/construction, consumer durables and non-durables. The sectoral classification groups it by industry of origin instead [1]. In September 2026, IIP grew 6.7% [1]. The use-based split shows that this growth was driven by investment and the input pipeline, not by broad-based consumption.

What the use-based data reveals about growth drivers

• Investment-led growth: capital goods were among the top contributors. This points to demand for machinery from public and private capex [1].
• Production pipeline: intermediate goods led growth. Inputs feed downstream manufacturing, where motor vehicles, electrical equipment and rubber & plastics contributed most [1].
• Primary goods: they stayed a top contributor even though mining contracted 6.2%, helped by electricity & gas growing 11.2% [1].
• Manufacturing dominates: its weight of 76.062 in the new 2022-23 series means its 7.6% growth largely sets the headline figure [1][2].

Capex push → Capital goods ↑ → Intermediate goods ↑ → Manufacturing ↑ (7.6%)
                                                           ↓
                Consumption: Durables ↑6.0%  |  Non-durables ↑1.4%

Fig: Supply-side momentum and uneven demand

Significance of the durables–non-durables gap

• Uneven consumption: durables grew 6.0% but non-durables grew only 1.4% [1]. This suggests firm demand from higher-income buyers and weak demand for mass-consumption FMCG goods.
• Rural distress signal: non-durables track everyday spending by lower-income and rural households. Weak growth there points to income stress.
• Sustainability risk: investment-led growth without mass demand risks under-used capacity and may slow future private capex.
• Statistical caveat: IIP "primarily captures the organised sector" [3]. Many non-durables come from small unincorporated units, so the index may record demand moving from small to large producers and miss the full picture. Also, the September figure is a Quick Estimate with a response rate of only 86.5%, so it will be revised [1].

The use-based lens therefore shows supply-side, investment-driven momentum alongside weak and uneven mass consumption. A durable recovery needs stronger rural incomes and broad-based demand, together with better statistics. The TAC recommended an ASUSE-based index for unincorporated units and a seasonally adjusted IIP [3]. Taken together, these steps would support inclusive industrialisation under SDG 8 and SDG 9.