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Low base effect propels March core sector output to 32-month high

The output of eight core sectors expanded by 6.8 per cent in March — the very best in 32 months — pushed by a base effect-led uptick in manufacturing of pure fuel, metal, cement and electrical energy, official information confirmed on Friday.

The progress fee of the eight infrastructure sectors — coal, crude oil, pure fuel, refinery merchandise, fertilisers, metal, cement and electrical energy — was recorded at (-) 8.6 per cent in March final 12 months.

According to the info launched by the Commerce and Industry Ministry on Friday, manufacturing of pure fuel, metal, cement and electrical energy jumped 12.3 per cent, 23 per cent, 32.5 per cent and 21.6 per cent this March, as towards (-) 15.1 per cent, (-) 21.9 per cent, (-) 25.1 per cent and (-) 8.2 per cent in March 2020, respectively.

Coal, crude oil, refinery merchandise and fertiliser segments, in the meantime, recorded detrimental progress through the month below assessment.

During the total fiscal 2020-21 (April-March), the manufacturing of the eight sectors contracted by 7 per cent as towards a constructive progress of 0.4 per cent in 2019-20.

Commenting on the numbers, Icra Ltd chief economist Aditi Nayar mentioned the 6.8-per cent progress in March, a “32-month high”, is due to the base effect.

The low base of the lockdown-affected April 2020 would push up the year-on-year growth of the index of eight core industries to a pointy 50-70 per cent in April 2021, with exceptionally high progress anticipated in cement and metal, she additional mentioned.

“However, we’ve got noticed a slackening within the sequential momentum in April 2021 in electrical energy demand, automobile registrations, and technology of GST (items and companies tax) e-way payments, revealing the impression of the latest surge in Covid infections and localised restrictions.

“Based on the available data, we project the Index of Industrial Production (IIP) to record a sharp growth of 17.5-25 per cent in March 2021,” Nayar added.

In February 2021, the output of those sectors had dipped by 3.8 per cent.

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