Core sector grows 2.9% in March

It implies heightened volatility, due to which many analysts are doubting the core sector data as well as the IIP data

Production in the eight core sectors increased 2.9 per cent in March, indicating prospects for industrial growth were brighter than seen of late. However, it also implies heightened volatility, due to which many analysts are doubting the core sector data, as well as the Index of Industrial Production data.

“Core sector data is very volatile. It has been fluctuating for the last few months. We cannot establish any trend,” said D K Joshi, chief economist, CRISIL.

In March 2012, the eight core sectors had grown three per cent. The cumulative growth of the eight core sectors, which have a 38 per cent weight in IIP, stood at 2.6 per cent in 2012-13, against five per cent in 2011-12.

This March, seven of the eight sectors — coal, crude oil, petroleum refinery products, fertilisers, steel, cement and electricity — saw growth in output, against just three in February, showed official data released today.

Natural gas production fell 17.7 per cent in March, against a fall of 9.9 per cent in March 2012. The sector has been seeing contraction in output since February 2012.

While coal output rose 0.3 per cent in March, compared with 7.3 per cent a year earlier, the electricity sector’s output increased three per cent, against 2.8 per cent growth in March 2012. Crude oil production rose 0.2 per cent, compared with a 2.9 per cent decline in the corresponding month last year.

Fertiliser output grew 3.6 per cent in March, against 1.5 per cent a year earlier. While refinery production expanded 5.6 per cent, against 1.6 per cent in the year-ago period, cement output grew 6.6 per cent, compared with 7.1 per cent in March 2012.