Core sectors grew 7.4% in December; fastest pace in 3 months

Coal, electricity, Steel cement, see sharp rise; crude oil only sector to shrink

India’s eight core sectors’ output growth hit a three-month high of 7.4% in December, from a revised uptick of 5.7% in November, with all sectors except crude oil reporting a rise.

Overall, the eight core sectors have now registered an 8% growth in the first nine months of 2022-23, compared to 12.6% in the same period of 2021-22. Coal, cement, electricity and fertilisers have registered double digit or close to 10% growth through the year, while crude oil output is down 1.3%.

In December 2022, coal production and electricity generation led the way, rising 11.5% and 10%, respectively, followed by steel (9.2%), cement (9.1%) and fertilisers (7.3%). Refinery products grew 3.7% after two months of contraction, while natural gas output also recovered after a five-month shrinkage streak to grow 2.6%.

Crude oil output contracted for the seventh straight month, by 1.2%. Madan Sabnavis, chief economist at Bank of Baroda attributed this to volatile prices as well as limited investments in new fields.

On a month-on-month basis, however, output from all eight sectors that constitute 40.3% of the Index of Industrial Production (IIP) reported an uptick, with overall output rising 9.2%.

The IIP rose 7.1% in November, after a 4.2% fall in October. Mr. Sabnavis said he expects December’s IIP growth to be around 4%-5%.