Budget 2025: A close look at India's infrastructure output within a year before Sitharaman sets the ball rolling in Lok Sabha

India's infrastructure output continues to be a key topic in economic discussions. Budget 2025 will be the second budget to be presented by Sitharaman during her second tenure as the finance minister in the PM Modi-led central government.

In India, infrastructure output refers to a combined index that measures the performance of Eight Core Industries: refinery production (weight: 28%), electricity generation (19.9%), steel production (17.9%), coal production (10.3%), crude oil production (8.9%), natural gas production (6.9%), cement production (5.4%) and fertilizers production (2.6%). Infrastructure accounts for nearly 40 per cent of India's industrial output.

India's core sector output grew by 4.3% in November, touching a four-month high, up from 3.7% in October. November's growth, however, was slower than the 7.9% recorded in the same month of 2023.


For December, core sector output grew by 4 per cent.

In the first eight months of the current financial year, the core sector grew 4.2%, significantly lower than 8.7% growth in the corresponding period of 2023-24.

In August, this year, the infra output shrank 1.8% from a year earlier, the first contraction in 42 months, compared with 6.1% expansion in the preceding month.

The Indian economy had slowed to 5.4% in the July-September quarter, lowest in seven quarters and experts expect it to bounce back in the second half of the fiscal. The slowdown, a seven-quarter low, marked a significant decline from 8.1% in the same period last year and from 6.7% in the previous quarter.

The slump in the second quarter’s growth was largely due to weaker manufacturing, mining and electricity and gas production. Agriculture sector showed improvement due to above-average rainfall, boosting farm incomes.

The Indian economy grew 8.2 per cent in the 2023-24 financial year.

As the government gears up for Budget '25, existing policies in taxation, investment incentives, and welfare programs will play a critical role. The principle of continuity and strategic realignment is likely to guide budgetary decisions, ensuring a seamless transition while addressing evolving economic demands.

With a coalition government in place, the budget will need to balance growth objectives with coalition partners' priorities, aiming to maintain economic stability and foster development.

This budget is expected to be a pivotal document, shaping India’s economic future amid a dynamic political landscape.