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Growth in refinery products, electricity and coal production pulled up India’s core sector growth in February 2020 (year-on-year) to an 11-month high of 5.5 per cent.
Cement and fertilisers, too, posted an increase in production during the month but crude oil, natural gas and cement output declined, according to data released by the Commerce and Industry Ministry on Tuesday.
Outlook not bright
The outlook, however, doesn’t seem very bright for March 2020, as the lockdown to check the spread of Covid-19 has disrupted the production process in the country and globally.
“The healthy growth in core sector industries and turnaround in non-oil merchandise exports would support the industrial growth in February 2020, despite the deepening contraction in auto production. On balance, we expect industrial output to record an improved growth of 2.5 per cent in February 2020, before slipping into a Covid-led contraction in March 2020,” said Aditi Nayar, Principal Economis, ICRA.
1% cumulative growth
The eight core industries comprise 40.27 per cent of the weight of items included in the Index of Industrial Production (IIP). The cumulative growth in the core sector during April to February 2019-20 was 1 per cent.
Electricity generation (weight of 19.85 per cent) rose 11 per cent in February, 2020 over February 2019. Its cumulative index increased by 1.8 per cent during April-February, 2019-20 over the corresponding period of the previous year.
Coal production (weight of 10.33 per cent) increased by 10.3 per cent in February 2020 but its total growth in the April-February 2019-20 period fell by 1.2 per cent.
Petroleum refinery production (weight of 28.04 per cent) increased by 7.4 per cent in February 2020 over February 2019. Its cumulative index increased by 0.3 per cent during April-February 2019-20 over the corresponding previous period.
Steel production (weight of 17.92 per cent) fell marginally by 0.4 per cent in February 2020. However, in the first 11 months of the fiscal, steel production posted an overall increase of 5 per cent.
Crude oil production (weight of 8.98 per cent) declined by 6.4 per cent in February 2020 and, overall, its cumulative index declined by 6 per cent during April-February 2019-20 over the corresponding previous period.
Cement production (weight of 5.37 per cent) went up by 8.6 per cent in February 2020 while in the April-February 2019-20 period, it rose by 1.8 per cent.
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