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Pulled down by the Covid-19 induced lockdown in the last week of March and also muted activity in the week prior to that, the Country’s core sector industries growth contracted 6.5 per cent in March 2020, official data showed.
This is much lower than the 7.1 per cent growth recorded in February 2020.
In March last year, the eight core industries output grew 5.8 per cent.
Only one industry—Coal, recorded growth in output at 4 per cent for the month under review. All the remaining seven core industries—crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity —registered contraction in March 2020.
While Crude oil contracted 5.5 per cent and natural gas saw contraction of 15.2 per cent, fertilisers output contracted 11.9 per cent.
Refinery products contracted 0.5 per cent and steel output too contracted 13 per cent. Cement was badly hit with output contracting 24.7 per cent in March 2020. Electricity output contracted 7.2 per cent.
For the entire 2019-20, the core industries output grew 0.6 per cent, much lower than 4.4 percent in previous fiscal. The fact that full year infrastructure industries grew just 0.6 per cent is reflective also of low capex activity in the country which will get reflected in the investment rate number too.
Expert take
Madan Sabnavis, Chief Economist, CARE Ratings, told BusinessLine that the negative print of the core sector in March will get reflected in a bigger m in the Index of Industrial Production (IIP) in March 2020. This also gives an indication of what could be expected in April 2020 when there was full month of lockdown. “The picture in April would be even more unsatisfactory with drop in all segments to be expected.”, he said.
Sabnavis also highlighted that activities had slowed down in some States a week ahead of the lockdown as the States had placed some restrictions. The year end production push adopted by companies usually has also not happened this time round due to the lockdown.
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