The output pace of India’s eight major industries slowed down in December to 2.6 per cent, according to latest official data. According to the Ministry of Commerce and Industry, the Index of Eight Core Industries (ECI) rose by 3.4 per cent in November 2018 and 3.8 per cent in December 2017.
“The combined Index of Eight Core Industries stood at 132.1 in December, 2018, which was 2.6 per cent higher as compared to the index of December, 2017. Its cumulative growth during April to December, 2018-19 was 4.8 per cent,” the Ministry said in a statement.
The eight core industries are coal, crude oil, natural gas, refinery products, fertilisers, steel and cement. Steel and cement continue to be the leading sectors, with double digit growth at 13.2 per cent and 11.6 per cent respectively in December 2018.
In December 2017, steel sector output grew 0.4 per cent, while cement output recorded 17.7 per cent growth.
While coal sector output grew 0.9 per cent, crude oil output contracted 4.3 per cent. Natural gas output was up 4.2 per cent and electricity output grew 4 per cent in December 2018. Refinery products and fertiliser output contracted 4.8 per cent and 2.4 per cent respectively during the month under review.
The energy complex performance has not been up to the mark, which can be attributed to lower crude oil prices, which impacts crude oil production as well as exports of refinery products.
Import of fertilisers has to an extent kept domestic production down over the last few months. Both power and coal production have witnessed slower growth as the initial impetus of some government schemes has tapered. Imports of coal have also been higher, which have replaced domestic production.
Given this trend in core data, the index of industrial production (IIP) growth for December 2018 is likely to be in the 2.5 per cent range with a downward bias given the high base effect.