Core sector growth rebounds to 4.3% in November, driven by cement and electricity
New Delhi: Growth in the output of eight key infrastructure industries, known as the core sector, rebounded to a four-month high of 4.3% year-on-year (Y-o-Y) in November, up from a revised 3.7% in October, despite a high base effect.
However, this is a significant slowdown from the 7.9% growth recorded in November 2023.
In August, core sector output had contracted (-1.6%) for the first time in 42 months.
According to data released by the Ministry of Commerce and Industry, the November recovery was driven by increased output in cement (13%), electricity (3.8%), and fertilisers (2%).
However, while sectors like coal (7.5%), refinery products (2.9%), and steel (4.8%) remained in the growth zone, their expansion slowed compared to October.
Conversely, crude oil (-2.1%) and natural gas (-1.9%) output contracted during the month.
“The production of cement, coal, steel, electricity, refinery products, and fertilisers recorded positive growth in November 2024,” the Ministry of Commerce noted in a statement.
These eight industries significantly influence the Index of Industrial Production (IIP), contributing 40.27% of its weight.
Industrial production rose to a three-month high of 3.5% in October, aided by the festive season and a core sector recovery.
For the first half of FY25 (April-November), core industry output grew by 4.2%, a marked decline from 8.7% during the same period in FY24.
While the core sector's expansion supports economic recovery, overall growth has slowed to a seven-quarter low of 5.4%, prompting the Reserve Bank of India (RBI) and economists to revise the GDP forecast.
The RBI now projects GDP growth for FY25 at 6.6%, down from the earlier estimate of 7.2%.
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