Crude oil, refinery products decelerate March's core industries output

Lower extraction of crude oil and production of refinery products slowed the pace of India's eight major industries' output in March, official data showed on Tuesday.

The Index of Eight Core Industries (ECI), which represent the output of major sectors like coal, steel, cement and electricity rose by 4.1 per cent in March 2018 compared to an increase of 5.4 per cent in February.

Even on a year-on-year basis, the 'Index of Eight Core Industries' (ECI), which represent the output of major sectors like coal, steel, cement and electricity showed a downtrend. The index had registered a rise of 5.2 per cent during the corresponding month of 2017.

"The combined Index of Eight Core Industries stands at 138 in March, 2018, which was 4.1 per cent higher as compared to the index of March, 2017," the Commerce & Industry Ministry said in a statement.

"Its cumulative growth during April to March, 2017-18 was 4.2 per cent."

The ECI index carries 40.27 per cent weightage of the Index of Industrial Production (IIP) which is the macro-gauge for India's factory output.

On a sector-specific basis, refinery products, which has the highest weightage of 28.03 per cent, grew by just 1 per cent in March 2018 as compared with the corresponding month of the last fiscal.

Electricity generation, which has the second highest weightage of 19.85, picked up by 4.5 per cent.

Steel production, the third most important component with weightage of 17.92, rose by 4.7 per cent during the month under review, whereas coal mining, with a 10.33 weightage, edged higher by 9.1 per cent.

On the other hand, extraction of crude oil, which has an 8.98 weightage, declined by (-)1.6 per cent during the month under consideration.

The sub-index for natural gas output, with a weightage of 6.88, inched up by 1.3 per cent.

Cement production, which has a weightage of 5.37, edged higher by 13 per cent in March 2018.

Fertiliser manufacturing, which has the least weightage -- only 2.63 -- edged-up by 3.2 per cent during the month under review.

"Coal, steel, cement and electricity sector has done well in March 2018. Coal sector performance is noteworthy, after five months of lackluster growth coal production grew 9.1 per cent," Devendra Kumar Pant, Chief Economist at India Ratings & Research was quoted as saying in a statement.

"Sequential decline in core sector growth in March 2018 is mainly explained by decline in refinery products production, which declined to 1 per cent in March 2018 from 7.8 per cent in February 2018."

--IANS

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