Core Sector Grows 6.7% in January

India’s core sectors grew at a faster clip in January from a year ago than in the previous month, with an uptick in cement, electricity, coal, refinery products and steel industries, indicating a strong start to the last quarter of 2017-18. The combined index of the eight core industries rose 6.7% in January compared to 4.2% in December 2017.

The eight core sector industries have a weight of around 40% in Index of Industrial Production.

ICRA expects IIP expansion to moderate to 6-6.5% in January from 7.1% in the previous month.

Coal output grew 3% during the month, after declining 0.1% in December 2017. Cement production grew 20.7% in January while electricity output grew 8.2%.

The pickup in the year-on-year growth of domestic coal production and coal imports contributed to a substantial improvement in expansion of electricity generation in January compared to that in the previous month. Fertilizers, crude oil and natural gas remained laggards and saw a contraction.

Industry experts said cement output growth is expected to remain healthy in the ongoing quarter, given the low base of the last quarter of 2016-17, although growth may not sustain at such high levels.

Cumulative growth in core sectors since the beginning of this fiscal was 4.3%. Crude oil production dropped 3.2% in January, and fertilizers 1.6%.

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