Core Sector Growth Climbed Positive Curves

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The growth of output of India’s eight major industries accelerated in March to 4.7 per cent on sequential and year-on-year basis, official data showed.

Higher production of cement and coal mainly pushed this growth.

The index of eight core industries had risen 4.5 per cent in March 2018. On a sequential basis, the core sector grew by 2.2 in February this year.

“The combined index of eight core industries stood at 145 in March 2019, which was 4.7 per cent higher compared with the index of March 2018. Its cumulative growth during April to March 2018-19 was 4.3 per cent,” the Ministry said in a statement.

On sector-specific basis, the output of refinery products, which has the highest weightage of 28.03, grew 4.3 per cent in March 2019 compared to the corresponding month of the last fiscal.

Electricity generation, which has the second highest weightage of 19.85, inched higher by 1.4 per cent.

Steel production, the third most important component with a weightage of 17.91, was up by 6.7 per cent during the month under review, whereas coal mining, with a 10.33 weightage, zoomed 9.1 per cent.

On the other hand, extraction of crude oil, which has a weightage of 8.98, declined minus 6.2 per cent during the month under consideration.

The sub-index for natural gas output, with a weightage of 6.87, edged-higher by 1.4 per cent.

Cement production, which has a weightage of 5.37, rose by 15.7 per cent in the month under review.

Fertiliser manufacturing, which has the least weightage of only 2.62, rose by 4.3 per cent in March.

The core sector index carries 40.27 per cent weightage of the items included in the index of industrial production (IIP).

“Growth performance of cement followed by coal and steel was the most pronounced in March 2019. Even on a cumulative basis these three segments stand out for FY19. It appears that government capex spending has clearly helped cement and steel sector,” said Sunil Sinha, Principal Economist, India Ratings and Research.

“Though some segments of core sector are doing well, core sector at an aggregate level is still falling short of expectation and will likely to remain so even in future. However, impetus to core segment may come once the new government comes to power in May 2019.”

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