Core sector output shrinks 1.5% in November
02 Jan 2020
Core sector industrial production in the country extended a declining trend, although at a slower pace of 1.5 per cent in November 2019, after falling 5.8 per cent in October. That brought cumulative core sector production growth during April-November 2019-20 to zero per cent.
Expansion in the eight core sector industries comprising coal, crude oil, natural gas, refinery products, fertiliser, steel, cement and electricity, which carry nearly 40.27 per cent of the weight of items included in the Index of Industrial Production (IIP), was dragged down by a decline in the production of coal, crude oil, natural gas, steel and electricity in the first eight months of the current fiscal (April-November 2019-20).
Production of coal, which has a weight of 10.33 per cent in the index of industrial production (IIP) declined by 2.5 per cent in November 2019 while cumulative coal production declined by 5.3 per cent during April-November,2019-20.
Production of crude oil (weight of 8.98 per cent in IIP) declined by 6 per cent in November 2019 while cumulative production of crude oil declined by 5.9 per cent during April-November 2019-20.
Production of natural gas (weight of 6.88per cent in IIP) declined by 6.4 per cent in November 2019 while cumulative production of natural gas declined by 3.1 per cent during April-November 2019-20.
Petroleum refinery production (weight of 28.04 per cent in IIP) increased by 3.1 per cent in November 2019, although cumulative refinery production declined by 1.1 per cent during April-November 2019-2.
Fertilizers production (weight of 2.63 per cent in IIP) increased by 13.6 per cent in November 2019 while cumulative fertiliser output increased by 4 per cent during April-November 2019-20.
Steel production (weight of 17.92 per cent in IIP) declined by 3.7 per cent in November 2019 while its cumulative production increased by 5.2 per cent during April-November 2019-20.
Cement production (weight of 5.37 per cent in IIP) increased by 4.1 per cent in November 2019 while cumulative cement production declined by 0.02 per cent during April-November 2019-20.
Electricity generation (weight of 19.85 per cent in IIP) declined by 5.7 per cent in November 2019 while cumulative generation of electricity increased by 0.7 per cent during April-November 2019-20.
Many expected factory output to record modest growth in November with retail sales of passenger vehicles growing 1 per cent year-on-year.
Commerce ministry data showed that non-oil merchandise exports grew 2.5 per cent in November.
Reserve Bank of India (RBI) had also come out with five successive rate cuts to buoy the credit market and the monetary transmission resulting in a sharp increase in retail inflation.
With India’s economic growth decelerating to a six-and-a-half-year low of 4.5 per cent in the July-September 2019-20 quarter on the back of slowing domestic and external demand, analysts see the end of a downward cycle and a revival of growth.