India's core sector output increased by 3.1% in October, showing an improvement from September but a significant drop compared to the previous year. The coal, refinery products, and steel sectors led the growth. Electricity generation growth remai...
By ET Bureau | Updated:
Agencies
New Delhi: India's core sector output rose 3.1% in October from 2.4% in the month before, but was sharply lower than 12.7% from a year ago, official data released on Friday showed.
If the August and September reading is excluded, the growth was slowest in nearly two years.
The core sector comprises eight industries: coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity.
Six of the eight sectors recorded positive growth at the start of the third quarter of the current financial year, according to the data released by the commerce and industry ministry.
Coal led with 7.8% growth, followed by refinery products at 5.2% and steel at 4.2%. Cement output rose 3.3%, electricity generation was up 0.6% and fertilizer production grew 0.4% in October.
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"While the growth in electricity generation improved marginally, it remained quite weak, continuing to weigh upon the growth in core sector output in the month," said Rahul Agrawal, senior economist at ICRA.
The base effect also played a role in lower growth in electricity, said Madan Sabnavis, chief economist at Bank of Baroda.
On the other hand, growth in natural gas and crude oil declined 1.2% and 4.8%, respectively.
"The construction-related indicators reported mixed trends, with the growth in steel production improving, while that in cement output deteriorating between these months, although both remained muted," Agarwal said.
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Overall, growth in the first seven months of 2024-25 was lower at 4.1% compared to 8.8% in the corresponding period last year. Among the eight sectors, coal was the best performing in the first seven months with a growth of 6.2%, followed by steel (5.9%), electricity (5.3%), and refinery products (2.7%). These eight sectors account for 40.27% of the weight in the Index of Industrial Production (IIP).
The IIP rebounded to 3.1% in September, after contracting to a 22-month low of 0.1% in August, according to official data released earlier this month. The 3.1% rise in core sector will ideally translate to around 4% growth in IIP, Sabnavis said.
