Photo used for representation purpose only. Core sectors’ output growth was led by double-digit upticks in cement also.
| Photo Credit: The Hindu

India’s eight core sectors’ output growth spurted to a three-month high of 6.7% in February, led by double-digit upticks in coal, natural gas and cement even as fertilisers’ production fell 9.5% to record the sharpest contraction since May 2021.

January’s Index of Core Industries (ICI) was revised to reflect a 4.1% rise, compared with the previous estimate of 3.6%, but that remained the slowest growth in 15 months. This is the second month in a row that fertilisers output dipped year-on-year, and marks the first such streak in two years.

In absolute terms, overall output levels were at a three-month low and 4.9% below January’s levels, which had marked a ten-month high. In sequential terms, the only segment to record an uptick over January’s production level was Cement (up 1.74%).

In year-on-year terms, crude oil production rose 7.9% in February, the highest uptick recorded in at least nine years, while the 11.3% uptick in natural gas output was a two-year high. February’s growth rates were the highest in four months for Cement (10.2%), Electricity (6.3%), and Coal (11.6%).

While Steel production growth eased slightly to 8.4% in February, refinery products recovered from a 4.3% contraction in January to rise 2.6%.

The ICI has a weightage of slightly over 40% weightage in the Index of Industrial Production (IIP) so economists expect industrial output growth to recover from the 3.8% uptick recorded in January.

ICRA chief economist Aditi Nayar reckoned the IIP would record an expansion of 6%-6.5% in February, while Bank of Baroda’s chief economist Madan Sabnavis pegged it in the range of 4% to 5%.

“The 6.7% uptick in February reversed the declining trend seen in December and January and cumulative growth so far in 2023-24 has been smart at 7.7%, coming over the 6.8% growth last year,” Mr. Sabnavis said.