New Delhi, April 1 (IANS) Contraction in refinery products and crude oil extraction decelerated the output pace of India’s eight major industries in February to 2.1 per cent year-on-year, official data showed on Monday.
According to the data from the Ministry of Commerce and Industry, the Index of Eight Core Industries (ECI) had risen by 5.4 per cent during the same period last year.
However, on a sequential basis, the index rose marginally to 2.1 per cent in February from 1.5 per cent in January 2019.
The core sector index carries 40.27 per cent weight of the items included in the Index of Industrial Production (IIP).
“The combined Index of Eight Core Industries stood at 125.8 in February 2019, which was 2.1 per cent higher as compared to the index of February 2018. Its cumulative growth during April to February, 2018-19 was 4.3 per cent,” the Ministry said in a statement.
On sector-specific basis, the output of refinery products, which has the highest weightage of 28.03, declined (-)0.8 per cent in February 2019 compared to the corresponding month of the last fiscal.
Electricity generation, which has the second highest weightage of 19.85, inched higher by 0.7 per cent.
However, steel production, the third most important component with a weightage of 17.91, was up by 4.9 per cent during the month under review, whereas coal mining, with a 10.33 weightage, inched-up 7.3 per cent.
On the other hand, extraction of crude oil, which has a weightage of 8.98, declined by (-)6.1 per cent during the month under consideration.
The sub-index for natural gas output, with a weightage of 6.87, edged-higher by 3.8 per cent.
Cement production, which has a weightage of 5.37, rose by 8 per cent in the month under review.
Fertiliser manufacturing, which has the least weightage — only 2.62, rose by 2.5 per cent in February.
“After recording a high single digit growth of 7.3 per cent in July 2018, core sector has consistently recorded a growth of low single digit, indicating weakness in the industrial growth,” said Sunil Kumar Sinha, Director, Public Finance, and Principal Economist, India Ratings and Research (Fitch Group).
“Moreover, different segments of core sector show wide variation in their growth rates across months,” he said.
According to Sinha, under the current growth inflation dynamics, some room is available for the Reserve Bank of India (RBI) to go for a 25 basis points cut in the policy rate in the first bi-monthly monetary policy review for FY 2019-20.