Electricity demand powers March core growth to 3.8%
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India's core sector output rose 3.8% year-on-year in March, helped by a pick-up in electricity demand and continued strength in construction-related sectors, official data released Monday showed.The core sector comprises eight industries: coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity. February had recorded a core sector expansion of 3.4% from a year ago, while in March last year, the year-on-year growth was 6.3%."The year-on-year rise in the core sector inched up slightly in March, led primarily by the higher growth in electricity generation amid rising temperatures," said Aditi Nayar, chief economist at ICRA Overall, core sector growth in FY25 slowed to 4.4%, the lowest in four years. In FY24, the core sector had grown by 7.6%.In March, six of the eight sectors recorded positive growth, with cement leading at 11.6%. Next was the fertiliser sector with a growth of 8.8%, followed by steel at 7.1%, electricity at 6.2%, coal at 1.6% and refinery products at 0.2%.Coal output was subdued for the second consecutive month."Growth in fertilisers was aided by a negative base effect as well as companies ramping up production in preparation for the kharif sowing," said Madan Sabnavis, chief economist at Bank of Baroda Sabnavis also highlighted strong momentum in cement and steel production, attributing it to higher government spending at the end of the year, as well as significant rise in private sector investment announcements during the fourth quarter. The output of crude oil and natural gas declined by 1.9% and 12.7%, respectively. Sabnavis said the oil and gas sector remained weak due to lower crude prices and a rise in natural gas imports.The eight sectors account for 40.27% weightage in the Index of Industrial Production ( IIP ).
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