Production in eight industries fell sequentially due to rain affecting mining, construction work
Production from India’s eight core regions grew 4.4% in September, the lowest pace of growth in seven months, breaking a three-month sequence of accelerating production that peaked in August with 11.5% growth.
On a sequential basis, this is the second consecutive month of decline in the index of eight core industries compiled by the Department for Promotion of Industry and Internal Trade. The index, which stood at 134.7 in July, fell nearly 1% month-on-month in August and another 5% in September.
In September 2020, when the economy had largely opened up after the national COVID-19 lockdown, core sector output grew by 0.6%. This September, five sectors registered healthy growth, while crude oil production declined by 1.7% and fertilizers and power remained in positive territory with growth rates of 0.02% and 0.3%, respectively. Natural gas production grew 27.5% in September, a 10.6% contraction in 2020, while cement production grew 10.8% from a 3.4% decline a year ago.
While coal supply continues to be a concern for the country’s electricity and metal producers, coal production grew by 8.1% in September and had no less base effect at work as coal production contracted by 21% in September 2020. There was a rapid increase. There was an increase of 20.5 in coal production. % in August 2021.
Economists attributed the fall in the index to heavy rains affecting mining, construction activity and power demand, and said the year-on-year growth rate will improve and is likely to remain in the same range in October.
“Despite pre-festive season inventory build-up as suggested by the GST e-way bill data, the impact of lower core sector growth on auto output and semiconductor shortage on auto output will push the September 2021 industrial output growth to 3%-5 expected to reduce by. Aditi Nair, Chief Economist, ICRA said. The core sector has about 40% weightage in the index of industrial production.
“On an encouraging note, core output in September exceeded the pre-Covid level of September 2019 by 5%, led by coal, natural gas, steel, cement and electricity,” he said.
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