All-round contraction in core sectors leads to 4.6% fall in overall index

May sharpen decline in IIP in Feb

Output of all the eight industries contracted in February, dragging down overall core sector production to a de-growth of 4.6 per cent in February which snapped mild growth in the previous two months.

This may adversely affect the index of industrial production (IIP) as the core sector has over 40 per cent weight in it.  In fact, contraction may accelerate in IIP in February from 1.6 per cent fall in January.

While some contraction was expected due to a high base effect of 6.4 per cent, the very fact that all segments saw fall in the output is a  worrisome,