Core sector growth slows down to 4.3 percent in March as compared to 10.4 percent last year

The production growth of eight infrastructure sectors slowed down to 4.3 percent in March due to a decline in the output of coal and crude oil, though for the full 2021-22 fiscal, the core sector recorded a 10.4 percent expansion, according to official data released on Friday.

The eight infrastructure sectors – coal, crude oil, natural gas, refinery products, fertiliser, steel, cement and electricity – had expanded by 6 percent in February.

During April-March 2021-22, the eight sectors grew by 10.4 percent compared to a contraction of 6.4 per cent in 2020-21. The output of coal and crude oil contracted by 0.1 per cent and 3.4 per cent in March.

The growth in the production of natural gas, steel, cement and electricity slowed down to 7.6 per cent, 3.7 per cent, 8.8 per cent and 4.9 per cent during the month under review as against 12.3 per cent, 31.5 per cent, 40.6 per cent and 22.5 per cent in March 2021 respectively, the data showed.

Refinery Products and fertilizers output grew by 6.2 per cent and 15.3 per cent respectively in March this year. Commenting on the numbers, Aditi Nayar, Chief Economist, ICRA Ltd, said that the pace of core sector growth slowed to a “sedate” 4.3 per cent in March 2022, with a slowdown in five of the eight constituents.

The double-digit growth recorded by fertiliser output in March came on the back of a very low base, she said adding in spite of the pickup in mobility, the growth in output of refinery products moderated in March.

“While the growth of the core sector output and non-oil merchandise exports slowed in March, several high-frequency indicators witnessed an improvement, based on which we expect the YoY IIP (index of industrial production) growth to rise modestly to 3-3.5 per cent in that month,” Nayar added.

The eight core industries comprise 40.27 per cent of the weight of items included in the IIP. 

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