The output of eight core industries grew 2.2 per cent in January compared with the same month last year. The higher output came on the back of more coal, refinery output and electricity production during the period under review, according to data released by the Ministry of Commerce.

According to CARE Ratings, electricity production witnessed a trend reversal and grew by 2.8 per cent against the sustained contraction seen in the previous 5 months. It was also higher than the 0.8 per cent growth in January 2019.

“Two back to back higher numbers, after four months of abysmal performance, gives us the confidence that economic scenario is turning on the road of recovery,” said Devarsh Vakil- Head, Advisory (Private Client Group), HDFC Securities.

The eight core industries comprise 40.27 per cent of the weight of items included in the Index of Industrial Production (IIP). The eight core industries are coal, refinery products, steel, cement, electricity, natural gas, crude oil and fertilisers.

According to CARE Ratings, coal production was at a 10-month high and increased by 8 per cent in January compared with the 2 per cent growth seen in January last year. The resumption of extraction activities post delayed monsoons this year has resulted in the increase in the production by the industry.

Natural gas and crude oil production reported a decline. Refinery output on the other hand grew 1.9 per cent in January, against 2.6 per cent contraction seen in the comparable month last year. It can partly be ascribed to the increased production of BS-VI fuel by the refiners to meet the upcoming demand ahead of the implementation of BS-VI norms from April, CARE Ratings said.

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