Eight core industries’ combined output increased by 6% in February as compared to 5.9% in the same month last year. It’s interesting to note that the Commerce and Industry Ministry increased the core sector growth estimate for January 2023 from 7.8 to 8.9 percent.
An official statement stated that the core industries’ overall growth rate from April 2022 to February 2023 was 7.8% (provisional), compared to 11.1% at the same time last year. The remaining seven sectors were in the black, with the exception of crude oil, whose output dropped by 4.9%.
Production growth for coal was 8.5%, for fertilizer it was 3.3%, for steel it was 6.9%, for cement it was 7.3%, and for power, it was 7.6%. While the production of refining products increased by 3.3%, the production of natural gas increased by 3.2%. The weight of the goods included in the Index of Industrial Production’s core industries is 40.27 percent (IIP).
“With unseasonal rainfall in March 2023 projected to limit the output of coal and electricity, core sector growth may decline further despite a moderately favorable base impact,” said Aditi Nayar, Chief Economist, ICRA.
“The steel and cement industries have outperformed, partly as a result of an increase in infrastructure activity in both the public and private sectors. The latter started to complete projects actively towards the conclusion of the year. While businesses increase production to make up for declining stocks, the demand for fertilizers is still rising rapidly. This year’s buoyancy was increased by last year’s negative growth,” said, Madan Sabnavis, Chief Economist, Bank of Baroda.
