Core sector output up 3.8% in December

India's core sector growth improved marginally to 3.8% in December from a nine-month low of 3.4% in the month before, data released by the commerce and industry ministry showed.

The core sector had contracted by 0.4% in December 2020.

"The disaggregated data reveals mixed cues, with two industries contracting (steel and crude oil), two reporting double-digit expansion (cement and natural gas) and the remaining four displaying a modest 2-6% rise," said Aditi Nayar, chief economist, ICRA.


The index of eight core industries measures the output of eight infrastructure industries - coal, crude, natural gas, refinery products, fertilisers, cement, steel and electricity.

The core sector index has a 40.27% weight in the index of industrial production (IIP) and a low growth points to a likely weak industrial growth as well in December.

"We expect the IIP to report a feeble rise of less than 2% on a YoY basis in that month (December), and print below the expansion displayed by the core sector for the fourth consecutive month," said Nayar.

"Similar to the eight core industries, the December 2021 YoY performance of many high-frequency indicators has trailed the respective growth recorded in October 2021."

Following the contraction in November 2021, cement output resumed double-digit growth in December 2021 with output growing 12.9% from in December from a year ago.

Production of coal rose 5.2% in December; natural gas 19.5%, refinery products by 5.9%, fertilisers 3.5% and electricity 2.5%.

Steel and crude oil declined 1% and 1.8% respectively.

The overall core sector growth in the April-December period was 12.6% over the corresponding period last year.