August 2021: Core Sector Growth at 11.6%

India’s core sector growth accelerated to 11.6% in August, lifting the overall output 3.9% higher over the pre-pandemic level in August 2019.

Experts said the data pointed to a strong recovery in the infrastructure sector and the economy after the second wave of the pandemic.

A 6.9% contraction in August last year has provided a favourable base effect to the growth this year. Core sector output had expanded 9.9% in July.

The Index of Core Industries measures the output of eight infrastructure sectors: coal, steel, cement, fertiliser, electricity, natural gas, refinery products and crude oil. The index is up 19.3% for the April-August period from a year earlier.Six of these sectors — coal (20.6%), natural gas (20.6%), refinery products (9.1%), steel (5.1%), cement (36.3%) and electricity (15.3%) — posted growth in August, while output of crude oil (-2.3%) and fertiliser (-3.1%) shrank from a year earlier.

A weaker monsoon in the month may have helped, allowing infrastructure activity to continue uninterrupted, but heavy rains and waning base effect could dampen growth in September.

The core sector index makes up around two-fifths the Index of Industrial Production, making it a lead indicator of industrial activity.

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