India's core sector growth reaches 3-month high of 6.7% in Feb

In a promising sign for the Indian economy, the core sector growth rose to a three-month high of 6.7% in February from 4.1% in the previous month, indicating a potential revival from the sluggish trends observed in previous months,official data released on Thursday showed reportedly.The core sector, which comprises eight key industries including coal, crude oil, natural gas, refinery products, fertilizers, steel, cement, and electricity, serves as a crucial barometer for gauging the overall industrial performance of the nation.
Except fertiliser, the output of all other industries increased in February, according to data released by the commerce and industry ministry. "There has been all-round performance across the eight sectors, barring fertilisers, which can be explained by high base effect as well as the fact that this is the period of harvest where there is less demand for the products," according to Madan Sabnavis, chief economist, Bank of Baroda.

Electricity generation, which has 19.85% weight in the Index of Eight Core Industries, witnessed 6.3% year-on-year growth in February. Cumulative year-on-year growth in the sector in the first 11 months of the fiscal stood at 6.8%, as per the data released by the Ministry of Commerce & Industry.
Three of the eight core industries displayed a double-digit expansion in February 2024, namely, coal, cement and natural gas. Cumulatively, the growth rate in the output of these eight sectors slowed to 7.7% in April-January this fiscal, as against 8.2% a year ago. The eight core sectors have a 40.27% share in the country's Index of Industrial Production (IIP). Economists expect the IIP to record an expansion of 4-6.5% in February. The IIP had slowed to 3.8% in January 2024 from 4.2% in December 2023.
“Given the healthy improvement in the core sector growth, we expect the IIP to record an expansion of 6.0-6.5% in February,” Aditi Nayar, chief economist at ICRA, reportedly quoted as saying .

(Ira Singh, Asstt Editor, Gandhinagar)