Lower base, expansion in output of seven of eight industries attributed
Growth in the output of the core sector, which consists of eight infrastructure industries, reached a four-month high of 7.8 per cent in January, due to a lower base and expansion in the output of seven of the eight industries.
Data released by the industry department on Tuesday showed sequential acceleration in output growth in five sectors, namely coal (13.4 per cent), electricity (12 per cent), natural gas (5.3 per cent), refinery products (4.5 per cent) and fertilisers (17.9 per cent). On the other hand, the growth in steel (6.2 per cent) and cement (4.6 per cent) decelerated, but remained in expansion territory.
Meanwhile, crude oil (-1.1 per cent) contracted for the eighth consecutive month.
Madan Sabanvis, Chief Economist, Bank of Baroda says that the growth in fertilisers is due to supplies to non-crops as well as replenishment of inventory, whereas the growth in steel and cement sector is attributable to infrastructure activity taking off largely due to push by the Centre.
“Growth in coal and electricity is indicative of steady industrial activity during the month. Higher power demand indicates high growth in the services sector too. With roads, railways and metals segments witnessing traction, this is a good sign for the economy on the investment front,” Sabanvis said.
The eight core industries account for 40.27 per cent of the weight of the items included in the Index of Industrial Production (IIP). The growth in January comes in the wake of the seven per cent increase in December, which was on the basis of positive expansion in seven out of eight industries.
“With these figures, IIP growth for the month (January) can be expected at 5-6 per cent,” added Sabanvis.
The cumulative growth rate of Index of Core Industries (ICI) during April-January 2022-23 was 7.9 per cent (provisional) over the corresponding period of last year
The data for core industries comes along with GDP estimates for the third quarter (October-December) of FY23, released by the Ministry of Statistics and Programme Implementation (MoSPI) on Tuesday.
The data showed that the Indian economy grew at a rate of 4.4 per cent in Q3FY23. However, in the current financial year, India’s gross domestic product (GDP) is expected to grow by seven per cent.
In the first Advance Estimates released in January too, MoSPI had estimated seven per cent GDP growth in FY23, marginally higher than projections made by the Reserve Bank of India (RBI) and World Bank at 6.8 per cent and 6.9 per cent, respectively.
| Month | Coal | Crude Oil | Electricity | Steel | Cement | Natural gas | Fertilisers | Refinery Products | Overall growth |
| January 2022 | 8.2 | -2.4 | 0.9 | 3.8 | 14.1 | 11.7 | -2 | 3.7 | 4 |
| February | 6.6 | -2.2 | 4.5 | 5.6 | 4.2 | 12.5 | -1.4 | 8.8 | 5.9 |
| March | 0.3 | -3.4 | 6.1 | 4.1 | 9 | 7.6 | 15.3 | 6.1 | 4.8 |
| April | 30.1 | -0.9 | 11.8 | 2.5 | 7.4 | 6.4 | 8.8 | 9.2 | 9.5 |
| May | 33.5 | 4.6 | 23.5 | 15.1 | 26.2 | 7 | 22.9 | 16.7 | 19.3 |
| June | 32.1 | -1.7 | 16.5 | 3.3 | 19.7 | 1.2 | 8.2 | 15.1 | 13.1 |
| July | 11.4 | -3.8 | 2.3 | 7.5 | 0.7 | -0.3 | 6.2 | 6.2 | 4.8 |
| August | 7.7 | -3.3 | 1.4 | 5.8 | 2.1 | -0.9 | 11.9 | 7 | 4.2 |
| September | 12.1 | -2.3 | 11.6 | 7.7 | 12.4 | -1.7 | 11.8 | 6.6 | 8.3 |
| October | 3.8 | -2.2 | 1.2 | 5.8 | -4.2 | -4.2 | 5.4 | -3.1 | 0.7 |
| November * | 12.2 | -1.1 | 12.7 | 11.7 | 29 | -0.7 | 6.4 | -9.3 | 5.7 |
| December* | 12.2 | -1.2 | 10.4 | 6.3 | 9.5 | 2.6 | 7.3 | 3.7 | 7 |
| January 2023* | 13.4 | -1.1 | 12 | 6.2 | 4.6 | 5.3 | 17.9 | 4.5 | 7.8 |
Source: Ministry of Commerce and Industry
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