India’s Dec core sector growth rises sequentially, YoY

India’s eight core industries’ production rose in December 2021 on a sequential basis, official data showed on Monday.

The growth rate of the eight major industries in December 2021, on a sequential basis, rose to 3.8 per cent from 3.4 per cent in November 2021.

Similarly, the Index of Eight Core Industries’ (ICI) index reading rose on a year-on-year basis.

The ICI reading during December 2020 stood at 0.4 per cent.

The ICI index comprises 40.27 per cent of the weight of items included in the Index of Industrial Production (IIP), and comprises coal, crude oil, natural gas, refinery products, fertilisers, steel, cement, and electricity.

“Final growth rate of Index of Eight Core Industries for September 2021 is revised to 5.4 per cent from its provisional level 4.4 per cent,” a Ministry of Commerce and Industry statement said.

“The growth rate of ICI during April-December 2021 was 12.6 per cent (P) as compared to the corresponding period of last FY.”

On a sector-specific basis, the output of coal, which has a weightage of 10.33 per cent in the index, showed a growth of 5.2 per cent in December 2021 over the same month of the previous year.

Similarly, the output of refinery products, which has the highest weightage of 28.04 per cent, rose by 5.9 per cent, compared to the corresponding month of the last fiscal.

Electricity generation, which has the second highest weightage of 19.85 per cent, was up by 2.5 per cent, whereas steel production was down by 1 per cent last month.

The extraction of crude oil, which has a weightage of 8.98 per cent, declined by 1.8 per cent during the month under consideration, even though the sub-index for natural gas output, with a weightage of 6.88 per cent, rose by 19.5 per cent.

Cement production, which has a weightage of 5.37 per cent, declined by 12.9 per cent in the month under review.

Fertiliser manufacturing, which has the least weightage — only 2.63 per cent — increased by 3.5 per cent.

ICRA Chief Economist Aditi Nayar said: “As the impact of heavy rains eased, the core sector growth improved slightly to 3.8 per cent in December 2021 from 3.4 per cent in November 2021, while remaining considerably lower than the 8.4 per cent expansion seen in October 2021.

“The disaggregated data reveals mixed cues, with two industries contracting (steel and crude oil), two reporting double-digit expansion (cement and natural gas), and the remaining four displaying a modest 2-6 per cent rise.”




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