Core sector growth at 6.8% in March
The core sector grew by 6.8 per cent in March helped by the low base in the same month last year, but contracted by 7 per cent for the fiscal 2020-21.
The combined index of eight core industries stood at 143.1 in March, rising 6.8 per cent, the highest in 32 moths, compared to March 2020 when the index had fallen -8.6 per cent.
"Notwithstanding the base effect led-jump in the core sector growth to a 32month high 6.8 per cent in March 2021, the pace of expansion was weaker than our forecast of a 10 per cent expansion, with a surprisingly sharp contraction in coal, and milder de-growth in fertilisers, crude oil and petroleum products," said Aditi Nayar, chief economist, Icra.
"We had expected the core sector to expand by around 10 per cent in March 2021, boosted by the low base of the commencement of the nationwide lockdown," she added.
Cement, steel, electricity and natural gas reported robust growth ranging from 12-32 per cent. But coal production declined by 21.9 per cent in March.
The low base of the lockdown will also push up the year-on-year expansion of the index of core industries in April to a sharp 5070 per cent. In April 2020, the core sector had contracted 37.9 per cent due to the lock-down. Icra expects exceptionally high growth in cement and steel.
"However, there has been a slackening in the sequential momentum in April in electricity demand, vehicle registrations, and generation of GST e-way bills, revealing the impact of the recent surge in Covid infections and localised restrictions," said Nayar.