Core industries’ output grows at 4.1 per cent in March

K.R.Srivats New Delhi | Updated on May 01, 2018


Reflecting the buoyancy in industrial output in the last few months of fiscal 2017-18, the eight core industries’ output grew 4.1 per cent in March this year.

This is however lower than the 5.2 per cent print in March 2017 and 5.4 per cent in February 2018, official data released on Tuesday showed.

For 2017-18, the cumulative growth in core industries’ output —which account for about 40 per cent weightage in IIP—came in at 4.2 per cent, lower than 4.8 per cent in previous fiscal.

For March 2018, five of the eight core sectors recorded a sequential moderation in growth, which was partly related to the base effect . Only crude oil recorded a contraction in production in that month.


Devendra Kumar Pant, Chief Economist and Senior Director (public finance), India Ratings and Research, said that notwithstanding strong base (March 2017 at 5.2%), core sector growth in March 2018 came in at 4.1%. 

It has declined both sequentially (February 2018 at 5.4%) and year-on-year. 
Coal, steel, cement and electricity sector has done well in March 2018. Coal sector performance is noteworthy, after five months of lacklustre growth, with its production grew 9.1%. Although cement production grew 13.0% in March 2018, it has lost some steam, according to Pant. 

Sequential decline in core sector growth in March 2018 is mainly due to drop in refinery products production. Refinery products output fell to 1% in March 2018 from 7.8% growth in February 2018, he said.

Aditi Nayar, Principal Economist, ICRA said that the trend in the growth of core sector output, auto production and non-oil merchandise exports, as well as the unfavourable base effect, suggest an impending dip in the pace of expansion of the IIP below 7.0% in March 2018, after a gap of four months. 

Meanwhile, the core industries’ output growth for December 2017 has been revised downward to 3.8 per cent from 4.2 per cent.

Richa Gupta, Senior Economist and Senior Director, Deloitte India said that although the infrastructure output has eased compared to the stronger prints over the last two months, it remains healthy on an average. Positive changes have largely been driven by healthy outputs of coal, and stability across steel and electricity that bodes well for industry output, she said.

It is important to note that the relative slowdown across core sectors have been beset by a negative base effect and the numbers show substantial improvement across all sectors in absolute terms, according to Richa Gupta.

Published on May 01, 2018

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