Eight core industries’ output contracts 1.3% in December

New Delhi: The output of eight core infrastructure sectors fell for the third month in a row by 1.3 per cent in December 2020, brought down by crude oil, natural gas, refinery products, fertiliser, steel and cement sectors, which fared poorly. The core sectors had expanded by 3.1 per cent in December 2019, according to the provisional data released by the Commerce and Industry Ministry on Friday.

Barring coal and electricity, all sectors recorded negative growth in December 2020.

During April-December 2020-21, the sectors' output declined by 10.1 per cent against a growth rate of 0.6 per cent in the same period of the previous year.

The output of crude oil, natural gas, refinery products, fertiliser, steel and cement declined by 3.6 per cent, 7.2 per cent, 2.8 per cent, 2.9 per cent, 2.7 per cent, and 9.7 per cent, respectively.

The growth in coal production slowed down to 2.2 per cent in the month under review from 6.1 per cent in the same month last year. However, electricity output grew by 4.2 per cent in December 2020.

The eight core industries constitute 40.27 per cent of the Index of Industrial Production (IIP).

The government also revised core sector output data for September 2020 showing a growth rate of 0.6 per cent in the month against the earlier projection of 0.1 per cent contraction.

Commenting on the data, ICRA Principal Economist Aditi Nayar said that discouragingly, the core index continued to contract for the third consecutive month in December 2020.

"Based on the plateau in the core sector data, juxtaposed with the uptick in auto production trends and recovery in non-oil merchandise exports, we expected the IIP to rebound to a modest growth of 0.5-1.5 per cent in December 2020, trailing the level seen in October 2020," she said.