According to the Ministry of Commerce & Industry data released on Monday showed that the index of eight core industries or ICI stood at 126.7 in April 2021, showing an increase of 56.1% as compared to the index of April 2020.
The Office of Economic Adviser, Department for Promotion of Industry and Internal Trade is releasing the Index of Eight Core Industries (ICI) for April 2021.ICI measures combined and individual performance of production in selected eight core industries viz. Coal, Crude Oil, Natural Gas, Refinery Products, Fertilizers, Steel, Cement and Electricity.
The Eight Core Industries comprise 40.27% of the weight of items included in the Index of Industrial Production (IIP).
The combined ICI stood at 126.7 in April 2021, which increased by 56.1% (provisional) as compared to the Index of April 2020. This high growth rate in April 2021 is largely due to the low Index base in April 2020 consequent to the low industrial production across all sectors caused by nationwide lockdown imposed to contain the spread of Covid-19 last year. The month over month production of eight core industries, as captured by ICI, declined by 15.1% (P) in April 2021 compared to March 2021(P) due to the emergence of the second wave of infectious COVID-19.
The final growth rate of the Index of Eight Core Industries for January2021is revised to 1.3% from its provisional level of 0.1 %. The growth rate of ICI during April-March 2020-21 was (-)6.5% (P) as compared to the corresponding period of last FY.
Ms. Aditi Nayar, Chief Economist, ICRA said, ''as expected, the low base of the nationwide lockdown pushed up the core sector expansion to 56% in April 2021, a shade lower than our forecast of around 60%. The improvement was fairly broad-based, with an expected spike in the growth of cement and steel, although both lagged our projections suggesting some impact of the regional lockdowns on activity. The range of outcomes in April 2021 was huge, with a continued contraction in crude oil reflecting an insulated mining sector during the lockdown, and a massive 549% YoY expansion in cement.”
On a subdued note, the core sector in April 2021 trailed the April 2019 level by 3%, with six of its eight constituents lagging the pre covid level.
“We expect the IIP to record a transient spike to a 130-150% expansion in April 2021, followed by a moderation in May 2021 in line with the proliferation in state-wise restrictions,” Aditi Nayar added.
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