Core Sector Rebounds On A Low Base Before Second Covid Wave
Trucks travel past a sugar factory in the Jalana district of Maharashtra, India, on Tuesday, March 23, 2021. 2021. Photographer: Dhiraj Singh/Bloomberg

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.

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