Core Sector Industries Post 4% Growth in December

The eight core sectors—coal, natural gas, crude oil, refinery products, fertilizers, cement, steel, and electricity—account for 40.27% of the Index of Industrial Production (IIP). Growth rates in these industries serve as indicators of overall industrial growth.

India's eight core sector industries recorded a year-over-year growth of 4% in December 2024, driven by increased production in coal, steel, and electricity, according to data published by the government on Friday.

The eight core sectors—coal, natural gas, crude oil, refinery products, fertilizers, cement, steel, and electricity—account for 40.27% of the Index of Industrial Production (IIP). Growth rates in these industries serve as indicators of overall industrial growth.

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Except for natural gas, all sectors experienced growth in December 2024. The performance of key sectors was as follows: coal (5.3%), refinery products (2.8%), crude oil (0.6%), fertilizers (1.7%), cement (4%), steel (5.1%), and electricity (5.1%).

Core sector growth for the period from April to December 2024 stood at 4.2%, compared to 8.3% in the same period of 2023. Experts attribute this decline to a high base effect and weaker performance in certain sectors.

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ICRA Chief Economist Aditi Nayar noted that core sector growth stood at 4.0% in December 2024, compared to a revised figure of 4.4% for November 2024. Four out of eight sectors contracted from the levels achieved in November 2024. The growth rate recorded is consistent with the average posted in the preceding two months, October and November 2024, which stood at 4.0%.

IIP growth for December 2024 is projected to moderate to 3-5%, impacted by an unfavorable base effect, down from 4.4% in December 2023.

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Bank of Baroda Chief Economist Madan Sabnavis stated that core sector growth moderated due to slower growth in five out of the eight segments. However, power (5.1%), cement (4%), and crude oil, which turned positive after registering negative growth last year, performed better.

According to Sabnavis, IIP growth for December 2024 is expected to be around 4-4.5%, supported by the consumer goods segment.

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