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The eight core industries’ output in April 2017 grew 2.5 per cent, lower than 8.7 per cent recorded in the same month last year. This reading has come under the revised base year of 2011-12 from 2004-05 earlier.
The shift in base year is in line with the new base year of 2011-12 for the index of industrial production (IIP).
The core industries — coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity — remain the same as in the 2004-05 series. However, their combined weightage in IIP stands higher at 40.27 per cent from 38 per cent earlier.
For 2016-17, the core industries’ output growth under the new base year was 4.8 per cent, up from 3 per cent last year.
Aditi Nayar, Principal Economist , ICRA, saidthe core sector presented mixed trends in April with three industries contracting and two others recording subdued growth.
The contraction in coal and cement output and sequential dip in growth of electricity generation weighed on the data. A favourable base effect boosted growth of fertilisers relative to March 2017.
Steel remained the fastest-growing core sector. The five-year definitive anti-dumping duties imposed by the government on import of hot-rolled and cold-rolled flat steel products will create a more stable operating environment for producers.
“Indicators present a mixed picture for industrial growth for April 2017, with the decline in growth of core industries and non-oil exports contrasting with the improvement in growth of automobile production. In our view, IIP growth may ease in April 2017 relative to 6.5 per cent in April 2016,” Nayar said.
DK Pant, Chief Economist, India Ratings, said changes such as inclusion of renewable energy in electricity and weighting diagram are in line with changes in IIP. Core infrastructure growth in April 2017 was affected by base effect, he said.
“Only steel and electricity provided support. Core sector growth is likely to be lacklustre unless supported by infrastructure and housing push”, he said.
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