According to statistics issued by the government on Tuesday, the growth of India’s eight key sectors fell to a four-month low of 8.1% in September from a 14-month peak of 12.5% in August. This was mainly because of a dramatic fall in the increase in the production of power, crude oil, and refinery products.
September had the biggest drop in five months in the sequential production of eight main sectors, falling 4.8%. Given the production of the core sector, experts predict that the September Index of Industrial Production (IIP) would also print in single digits. Roughly 40% of the IIP is made up of the eight key industries.
September’s core sector production usually declines in comparison to August’s, but this year’s 4.8% loss is the second-highest in the previous 11 years. The production of the core sector decreased 6.1% on a monthly basis in September 2019. With the exception of fertilizers, several essential sectors have seen a slowdown in activity due to September’s 13% above-average rainfall in India.
Only crude oil production, out of the eight key sectors, saw a 0.4% year-over-year decline in September compared to August, with the other seven recording slower output growth. After a two-month pause, September saw a decline in crude oil output again.
Electricity output fell to 9.3% in September from 15.3% in August, while refinery products production fell to 5.5% from 9.5%. During that time, the output of the cement industry fell to 4.7% from 19.3%, while the output of the coal sector fell to 16.1% from 17.9%.
The core sector’s output increase in the first half of the current fiscal year was 7.8%, down from 9.8% during the same time previous year. The reduction in the production of coal, power, and refinery products hindered the growth of the core sector as a whole in H1.
