Core industries output contracts 8.5% in August
Barring coal and fertiliser & all sectors record negative growth due to Covid
New Delhi: Contracting for the sixth consecutive month, the output of eight core infrastructure sectors dropped by 8.5 per cent in August, mainly due to decline in production of steel, refinery products and cement.
The production of eight core sectors had contracted 0.2 per cent in August 2019, showed data released by the Commerce and Industry Ministry on Wednesday.
Barring coal and fertiliser, all sectors - crude oil, natural gas, refinery products, steel, cement and electricity - recorded negative growth in August. During April-August 2020-21, the sectors' output dipped by 17.8 per cent as compared to a growth of 2.5 per cent in the same period previous year.
The rate of contraction in the eight key sectors has increased from July (- 8 per cent). The output of steel, refinery products, cement, natural gas, crude oil and electricity declined by 6.3 per cent, 19.1 per cent, 14.6 per cent, 9.5 per cent, 6.3 per cent and 2.7 per cent, respectively.
On the other hand, coal and fertiliser sector production grew by 3.6 per cent and 7.3 per cent, respectively, during the month under review as against (-) 8.6 per cent and 2.9 per cent rise in August 2019.
Commenting on the numbers, Icra Principal Economist Aditi Nayar said that based on these mixed trends, "we expect the contraction in the Index of Industrial Production (IIP) to ease modestly to 6-8 per cent in August 2020, from the initial 10.4 per cent in July 2020". The eight core industries accounts for 40.27 per cent in the IIP.