India's core sector output growth moderated to 4% in December 2024 from 5.1% a year ago, with natural gas production seeing negative growth. Seven of the eight core industries recorded positive growth, supported by government capital expenditure a...
By ET Bureau | Updated:
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New Delhi: India's core sector output moderated to 4% in December 2024, as against 5.1% growth registered a year ago, according to official data released on Friday.
On a monthly basis, the growth rate in the production of these sectors was lower than the 4.4% expansion recorded in November 2024.
In December, production of natural gas output recorded a negative growth of 1.8%.
The core sector, includes eight industries, coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity.
Seven of the eight sectors recorded a positive growth in December 2024, highest since April, data shows.
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The production growth of coal, refinery products, fertiliser, and steel moderated to 5.3%, 2.8%, 1.7%, and 5.1%, respectively, against 10.8%, 4.1%, 5.9% and 8.3% in December 2023. While cement rose to 4%, electricity output was at a five-month high of 5.1% in the month under review.
"Electricity growth was supported by the onset of winters in the northern regions thereby lifting up the power demand," said Paras Jasrai, senior economic analyst at India Ratings and Research (Ind-Ra). Steel and cement sectors were greatly supported by government capex which has picked up well in the past few months, he added.
The growth of core sectors was 4.2% during April-December this fiscal while it was 8.3 % in the same period in 2023-24.
The eight core sectors contribute 40.27% to the Index of Industrial Production (IIP), which measures overall industrial growth.
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The IIP growth was at a six-month high of 5.2% in November compared to 3.5% in October, according to official data released earlier this month. "The modest growth in the infrastructure sector output is expected to keep the IIP growth at around 3% year-on-year in December 2024," said Jasrai.
Bank of Baroda projects around 4-4.5% growth with support from the consumer goods segment.
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Ind-Ra projects core sector output to grow by 4.5% in January 2025 due to a favourable base effect and capital expenditure push by the union government and states.
