Production of eight core industries declined 7 per cent in FY21, according to government statistics released recently.
The combined output of eight core sector industries—coal, crude oil, natural gas, refinery products, fertilizers, steel, cement and electricity—was down 7 per cent in FY21. In FY20, the combined output had grown by a marginal 0.4 per cent. The pandemic has had a clear adverse impact on industrial output, as seen from these statistics.
It is worth observing that FY21 was the first year in the past decade at least when there has been a year-on-year decline in the index of eight core industries.
Production of eight core industries is widely regarded as a forerunner of overall industrial production. The eight industries account for around 40 per cent of the total industrial sector.
The petroleum refinery products category, which has the highest weight within the core sector index, suffered a 11.2 per cent decline in output.
In fact, all the eight industries, except fertilizers, showed a year-on-year decline in production. Coal production was down 4.8 per cent while steel production declined by 9.5 per cent.
The electricity sector was the only segment that turned out a respectable performance. Though electricity generated in FY21 declined compared with FY20, the decline was marginal at 0.6 per cent. Electricity accounts for nearly 20 per cent of the core sector index, and 8 per cent of the overall Index of Industrial Production (IIP). [Related story]
Prognosis
Statistics on the overall industrial sector, as measured by the Index of Industrial Production (IIP), is expected to be available by around May 12, 2021. Given that the core sector index has declined by 7 per cent in FY21, the performance of the overall industry is unlikely to be at much variance.
(Featured photograph for illustration only)