Core sector growth slows to 20-month low of 0.1% in Oct

India's core sector growth slowed to a 20-month low of 0.1% in October, plummeting from the 7.8% rise in the preceding month, even as economists warned of a slowdown ahead, data released on Wednesday showed.

The economy grew 6.3% in the July-September quarter, data showed.

Core sector output had grown 8.7% in October 2021.


The low growth is expected to pull down industrial growth in October, marking a weak start to the third quarter of the fiscal. The eight core industries comprise 40.27% of the weight of items included in the Index of Industrial Production (IIP).

"This (low core sector growth) points toward the fragility of the ongoing recovery," said Sunil Kumar Sinha, principal economist at India Ratings and Research. "Even the momentum (month-on-month seasonally adjusted growth) turned negative as the core sector output in October 2022 came in 2.2% lower than September 2022," he said.

India Ratings expects IIP growth to be under 3% in October. The IIP numbers for October will be released on December 12.

The spell of unseasonal rains in October and a larger number of holidays as the peak festive season fell in the month may have dented production, experts said.

The core sector index tracks output across eight infrastructure industries - crude oil, natural gas, coal, steel, cement, electricity, fertilisers, and refinery products.

Four of these sectors - crude oil (-2.2%), natural gas (-4.2%), refinery products (-3.1%) and cement (-4.3%) - saw a contraction in production, data showed. Coal (3.6%), fertilisers (5.4%), steel (4%) and electricity (0.4%) reported modest increase in output.

In April-October, core sector growth was 8.2% year on year.

Core sector growth may pick up in November as the Centre and states push capital expenditure toward the end of the year.