Core sectors contract for ninth consecutive month

NEW DELHI:  The output of eight core infrastructure sectors dropped by 2.5% in November 2020, contracting for the ninth month in a row. In November 2019, the production of these eight sectors had recorded a growth of 0.7%. 

The core sector had showed signs of recovery in September with only 0.1% contraction, compared with the 6.9% dip recorded in the previous month.  However, the momentum was short-lived as the core infra industries continued to contract in October and November. 

The numbers are significant as eight core industries account for 40.27% of the Index of Industrial Production (IIP) and the experts feel the core-sector data could drag down IIP numbers as well. The IIP grew 3.6% in October, posting growth for the first time in October since February. 

However, economists said the revival was aided by festival-season demand and a low base, which may not be sustainable. Aditi Nayar, principal economist at Icra, said, “We expect the IIP to revert to a temporary but unpalatable 2-5% contraction in November.” 

According to the data released by the commerce and industry ministry on Thursday, the drop in core sector output was mainly due to decline in production of natural gas, refinery products, steel and cement. Barring coal, fertiliser and electricity, all sectors — crude oil, natural gas, refinery products, steel and cement — recorded negative growth in November 2020. 

Retail inflation for industrial workers eases 
Retail inflation for industrial workers eased to 5.27% in November compared to 5.91% in October thanks to lower prices of certain food items. All-India Consumer Price Index for Industrial Workers for November increased by 0.4 points and stood at 119.9 points