Lowest core sector shrinking since March


India’s eight core industry sectors shrank just 0.8% in September on a year-on-year basis, recording their lowest contraction since March 2020, with electricity and steel output clocking positive growth for the first time since March, and coal production rising for the second month in a row.

Cement output improved in September, recording a 3.5% year-on-year drop — the lowest since March when production had collapsed 25.1%.

Surprisingly, fertilizer production which had grown consistently from May to August, marginally contracted in September by 0.3%. The Office of the Economic Adviser in the Department for Promotion of Industry and Internal Trade, which compiles the Index of Eight Core Industries, also revised its estimates for June and August.

Growth rate

“The final growth rate of Index of Eight Core Industries for June 2020 is revised to (-) 12.4%,” said an official statement on Thursday. Earlier, output was estimated to have declined by 15% in June. Similarly, August had recorded a 8.5% dip in the index as per earlier estimates, which has been moderated to a 7.3% decline.

Consequently, output contraction from the core sectors, which account for little over 40% of the Index of Industrial Production, stood at 14.9% in the first half of 2020-21, recovering slightly from the 17.8% decline recorded by August.

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