NEW DELHI: Bucking the trend of the past two months, the core sector in the country grew 5% in March, a significant rise from the 1% growth registered in February on account of a favourable base effect.
While there was robust growth in output of coal and steel sectors, cement, refinery products and fertilisers continued to witness a contraction over the previous year. Core sector growth for the year ended March hit a five-year high, registering a growth rate of 4.5% over the previous year. In FY2015-16, the year-on-year growth had stood at 3.9%. Electricity generation in the country accelerated to 5.9% in March from 1.5% in February.
With improved exports, steel output also recorded a strong double digit growth of 11% in the month under review. Cement output, after registering a significant improvement in February, however declined by 6.8% in March. According to experts, this contraction in cement output signals that the construction sector is yet to fully recover from the disruption that had set in after the demonetisation of high-value currency notes in November 2016.
“The pickup in expansion of auto production, core sector output and merchandise exports in value terms in March 2017 signals that IIP (index of industrial production) growth would revive relative to the 1.2% contraction recorded in February 2017,” said Aditi Nayar, principal economist at ratings agency ICRA.
According to commerce and industry ministry data released on Monday, coal production saw a growth of 10% in March from 7.1% in February. Double-digit expansion of Coal India’s output is likely to have supported growth in the sector. Fertiliser production declined by 0.8 % in March from the year earlier while crude oil output increased by 0.9% for the same period.