Core sector growth soars to 4-year high in April

Showing an impressive surge, infrastructure sectors grew at an over four-year high rate of 8.5 per cent in April, helped by double-digit expansion in refinery products and electricity generation. The eight core sectors - coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity - comprising nearly 38 per cent of India’s total industrial production, had shrunk by (-) 0.2 per cent in April last year.

The sectors, in April, logged the highest monthly production growth since February 2012, when the eight industrial segments had expanded by 8.6 per cent.

Rating agency ICRA said that despite the uptick in core sector growth, the expansion of the IIP (index of industrial production) in April is likely to fall short of 3 per cent growth recorded in April 2015, “partly on account of a somewhat unfavourable base effect as well as a continued contraction of merchandise exports”.

“The pickup in headline core sector growth in April from 6.4 per cent in March is enthusing, although the disaggregated data warrants some caution in terms of sustainability,” ICRA said in a statement.

The data released by the Commerce and Industry Ministry today showed that output of refinery products jumped by 17.9 per cent as against a negative growth of 2.9 per cent in April 2015.

Production of fertilisers, steel, cement and electricity grew by 7.8 per cent, 6.1 per cent, 4.4 per cent and 14.7 per cent, respectively, during the month under review compared to the year ago period.

However, production of coal, crude oil and natural gas declined in April this year.

While coal output dipped by 0.9 per cent, crude oil and natural gas production declined by 2.3 per cent and 6.8 per cent respectively.

The performance of eight core sectors has been improving consistently since December 2015 when the growth recovered to 0.9 per cent from 1.3-per cent contraction in previous month.  The growth improved further to 2.9 per cent in January and to 5.7 per cent in February.

In 2015-16, the sectors grew by 2.7 per cent, while they had expanded by 4.5 per cent in 2014-15.