Core Sector Rebounds On A Low Base Before Second Covid Wave
India’s core sector output jumped to its highest in 32 months, aided by a low base and a surge in electricity and cement production.
The index of eight core industries rose 6.8% in March 2021 compared with a revised contraction of 3.8% in February, according to data released by the Ministry of Commerce & Industry on Friday. The index rose to 143.1 in the reported month compared with 128.8 in February.
This came just ahead of a severe second Covid-19 wave in India which prompted several states to impose fresh curbs or lockdowns.
Notwithstanding the base effect led-jump, “the pace of expansion was weaker than our forecast of a 10.0% expansion, with a surprisingly sharp contraction in coal, and milder de-growth in fertilisers, crude oil and petroleum products”, said Aditi Nayar, principal economist at ICRA. “However, we have observed a slackening in the sequential momentum in April 2021 in electricity demand, vehicle registrations, and generation of GST e-way bills, revealing the impact of the recent surge in Covid infections and localised restrictions,” Nayar said.
Core Sector Internals:
Coal production declined 21.9% to 163.8 in March 2021.
Crude oil production declined 3.1% to 82.3.
Natural gas production rose 12.3% to 67.4.
Production of refinery products fell 0.7% to 134.4.
Fertilisers production contracted 5% to 93.4.
Steel production rose 23% to 163.8.
Cement production rose 32.5% to 171.9.
Electricity generation rose 21.6% to 178.6.