India’s core sector output grew by 4.3% in November, touching a four-month high, up from 3.7% in October, official data released on Tuesday showed. “The increase partly reflects the fading impact of heavy rainfall in the earlier months,” said Aditi Nayar, chief economist at ICRA.
November’s growth, however, was slower than the 7.9% recorded in the same month of 2023.
In the first eight months of the current financial year, the core sector grew 4.2%, significantly lower than 8.7% growth in the corresponding period of 2023-24. The core sector includes coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity. The eight industries account for 40.27% of the weight in the Index of Industrial Production (IIP), which measures industrial activity.
The IIP growth was at a three-month high of 3.5% in October, compared to 3.1% in September, according to official data released earlier this month.
The uptick in the core sector growth is expected to reflect in the IIP numbers.
ICRA has pegged IIP growth at 5%-7% in November. Bank of Baroda expects around 4.5-5%. The Indian economy had slowed to 5.4% in the July-September quarter, lowest in seven quarters and experts expect it to bounce back in second half of the fiscal.
Sectoral performance
Six of the eight sectors recorded a positive growth with cement leading at 13%, due to a low base. Next was coal at 7.5%, followed by steel (4.8%), electricity (3.8%), refinery products (2.9%) and fertilisers (2%), according to the data from the Ministry of Commerce and Industry. “There has been a pick-up in infra activity as seen also in government spending more on capex this month,” said Madan Sabnavis, chief economist at Bank of Baroda.
On the other hand, crude oil and natural gas declined by 2.1% and 1.9%, respectively.
