The output of eight-core industries expanded at a six-month high of 8.4% in April, far higher than the revised 4.9% growth reported in March. However, the current growth figure was lower than the 62.6% rise reported in April 2021.
Six of the eight core industries continued to increase in the reported period. Only two industries saw contraction: crude oil (-0.9%) and steel (-0.7%). Coal (28.8%), natural gas (6.4%), refinery products (9.2%), fertilisers (8.7%), cement (8%), and electricity (10.7%) were the other six sectors that showed strong growth in April (10.7%). In the index of industrial production (IIP), the eight key industries account for 40.27%.
However, the Commerce and Industry Ministry raised the ultimate growth rate of core industries for January 2022 to 4% from 3.7%. The growth output of core industries for December 2021 was updated up to 4.1% last month from 3.8% before.
In response to the new core data figures, Madan Sabnavis, Chief Economist at Bank of Baroda said that core sector growth of 8.4% in April is fairly outstanding given the high base of 62.6%.
“IIP growth (for April) too can be expected to be in the higher single-digit range of 6-8% based on these growth rates for the core sector,” he added.
Some of the numbers are impressive like coal which grew by 28.8% and power by 10.7%, he said. This is difficult to reconcile with the power crisis that was there in April with a shortage of coal and power being reported, according to Sabnavis. Evidently, this was not the case, he added.