February 2021: Core Sector Output Shrinks 4.6%

India’s core sector output contracted 4.6% in February from a year ago, the worst performance in the past six months, underlining a patchy economic recovery that faces headwinds from a second Covid-19 wave.

The core sector index, which measures the output of eight infrastructure industries — coal, electricity, crude oil, natural gas, steel, cement, fertiliser and refinery products – had risen 0.9% in January and 0.2% in December.

In the first 11 months of the financial year, core sector output was down 8.3% from a year ago, showed the data released by the ministry for commerce and industry on Wednesday. Growth may rebound from next month due to the base effect — core sector output had declined sharply from March 2020 as Covid-19 took hold and the country headed into a lockdown.

India’s key industrial states — Maharashtra, Karnataka and Tamil Nadu — are seeing a Covid-19 resurgence and measures to contain the spread there can dampen industrial growth.

All eight industry segments of the core sector saw a contraction in output in February.

Refinery products reported the sharpest 10.9% contraction followed by cement (-5.5%), coal (-4.4%), fertiliser (-3.7%), crude oil (-3.2%), steel (-1.8%), natural gas (-1.0%) and electricity (-0.2%).

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