India’s eight core sectors recorded a meagre 0.1% rise in output in January, propped up by a 5.1% rise in electricity, 2.7% growth in fertilisers and 2.6% growth in steel production, even as the other five sectors contracted.
The core sectors had recorded a marginal growth of 0.2% in December, as per updated data, compared to a 1.3% contraction estimated earlier. Core sectors have an almost 40% weightage in the index of industrial production, and economists expect overall industrial output to record less than 1% growth in January.
“This anaemic growth is a concern as this reflects physical production that has now declined by 8.8% for the year,” said Madan Sabnavis, chief economist, Care Ratings.
“Therefore, while the monetary value-added number has been positive, the same does not hold here,” he added.
“Cement has now de-grown for three months which is disappointing as this reflects developments in the construction sector which was expected to pick up,” said Mr. Sabnavis.
“Quite clearly, the mood in the real estate sector has not recovered as the focus is on disposing off inventory rather than going in for new projects,” he added.
The Office of the Economic Advisor in the Department of Promotion of Internal Trade and Investment said core sectors’ output had contracted by 0.5% in October 2020 compared with its revised estimate of a 0.9% dip.