India’s eight core industries see production rise in March


India’s eight major industries saw output surge during March 2021, official data showed on Friday.

The Index of Eight Core Industries’ reading for last month showed an expansion of 6.8 per cent from a decline of 8.6 per cent in output during the same month of last year.

On a sequential basis, the output of eight major industries had declined by 3.8 per cent in February 2021.

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

On a sector specific basis, the output of coal, which has a weight of 10.33 per cent in the index, showed a decline of 21.9 per cent in March 2021 over the same month of the previous year.

Similarly, the output of refinery products, which has the highest weightage of 28.04, declined 0.7 per cent compared to the corresponding month of the last fiscal.

Electricity generation, which has the second highest weightage of 19.85, however, rose by 21.6 per cent, whereas the steel production was down 23 per cent over last month.

The extraction of crude oil, which has an 8.98 weightage, declined by 3.1 per cent during the month under consideration.

However, the sub-index for natural gas output, with a weightage of 6.88, rose by 12.3 per cent.

Cement production, which has a weightage of 5.37, also rose by 32.5 per cent in the month under review.

Fertiliser manufacturing, which has the least weightage — only 2.63 — fell by 5 per cent.

ICRA’s Chief Economist Aditi Nayar said: “Notwithstanding the base effect led-jump in the core sector growth to a 32-month high 6.8 per cent in March 2021, the pace of expansion was weaker than our forecast of a 10 per cent expansion, with a surprisingly sharp contraction in coal, and milder de-growth in fertilisers, crude oil and petroleum products.”

“The low base of the lockdown would push up the YoY expansion of the index of eight core industries to a sharp 50-70 per cent in April 2021, with exceptionally high growth expected in cement and steel.”