NEW DELHI: The contraction in eight core industries moderated sharply to 0.8 per cent in September, compared to 7.3 per cent in August, on the back of a robust rebound incoalproduction, which was aided by a turnaround inelectricityandsteel. The low base — with a 5 per cent contraction seen in September 2019 — also helped, economists said.
Coal production jumped over 21 per cent, signalling demand from power and other industries using the fuel to blast their furnaces. And, the evidence was there in power generation, which grew 3.7 per cent in September, after falling for six straight months. Similarly, steel output rose 0.9 per cent as most part of the manufacturing sector seemed to be getting back on rail.
Fertiliser, which had been the sole segment reporting growth during the gloomy period since the March-end nationwide lockdown, saw a 0.3 per cent fall in production, while cement, crude oil, refinery products and natural gas remained in the red. Cement has seen lower output for seven straight months, indicating that construction activity — from real estate to highways — hasn’t come back to pre-Covid levels. In case of crude and natural gas, output has been down for at least 13 months, pointing to systemic issues with the two crucial sectors, where India imports bulk of its requirements.
“The sharp improvement in the core sector output is encouraging and collates well with the higher consumer spending seen in early October. IIP growth for this month may be -2-5 per cent,”CARE Ratingssaid.