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India’s primary sector output rose to a six-month high of 8.4% in April – the business benchmark

Output in eight basic infrastructure industries rose to a six-month high of 8.4 percent year on year in April, led by a sharp jump in coal production, data from the Ministry of Industry Promotion and Internal Trade (DPIIT) showed.

Growth in these eight sectors was 62.6 percent in April of last year due to the lower base impact from the pandemic-induced shutdown.

The eight sectors – coal, steel, cement, fertilizer, electricity, natural gas, refinery products and crude oil – make up two-fifths of India’s total industrial production. Among the eight sectors, excluding crude and steel, all posted positive year-over-year growth in April.

The production of coal, natural gas, refinery, fertilizer, electricity and cement increased by 28.8 percent, 6.4 percent, 9.2 percent, 8.7 percent, 8 percent and 10.7 percent, respectively, compared to last year. Steel production contracted by 0.7 percent.

Sunil Kumar Sinha, chief economist at India Ratings, said core sector growth was primarily driven by record annual growth in coal production.

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It should be noted that the growth of production of electricity, oil and refined products was on a high basis and reached its highest level in eight and six months, respectively. Sinha said output from core sectors just exceeded the pre-Covid level, indicating a weak recovery across infrastructure sectors.

Despite the low base, crude oil production contracted by 0.9 percent, following the same trend for more than four years now. “This means that the country’s dependence on global crude oil will be even higher, which is on the boil leading to imported inflation and associated consequences for the economy,” Sinha said. According to Bank of Baroda Chief Economist Madan Sabnavis, lower crude oil production is still a symptom of lower investment in this sector, which is needed in the current circumstances.

Growth in fertilizers is up to 8.7 percent on projected lines as the industry prepares for fall sowing. Besides, Sabnavis said the increase in subsidies announced by the government has given a boost to producers.

On a sequential basis, the index of eight major industries fell 9.5 percent in April amid geopolitical tensions.

Rating agencies are forecasting growth in the industrial production index at around medium to high single digits in April.

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