Growth of core sector reached the highest level of 13 months, the effect of increasing production in coal and crude

Core sector growth reaches 13-month high

Image Credit source: PTI

The growth has been seen due to the increase in the production of coal, crude oil, fertilizer and electricity. A year ago, in the month of May, there was a growth of 16.4 percent in the core infra sector.

Core Sectors in the Month of May (core sector) has reached a 13-month high of production growth. According to the data released by the government, the core sector growth in May has been 18.1 percent. this growth Coal ,coal), due to the rapid increase in the production of crude oil, fertilizer and electricity. A year ago, in the month of May, there was a growth of 16.4 percent in the core infra sector. The same growth in April this year was 9.3 percent. The record for growth in the core sector was recorded in April 2021, when the core sector grew with a growth of 62.6 percent. Although this rapid epidemic (covid) was registered due to the reduction in production after the ban imposed in April 2020.

How was the performance of the core sector in May?

According to the data released by the government, production of coal increased by 25.1 percent, production of crude oil by 4.6 percent, production of refinery products by 16.7 percent, production of fertilizers by 22.8 percent, production of cement sector by 26.3 percent and production of electricity by 22 percent in the month of May. Is. On the other hand, production of natural gas and steel has decreased by 7 percent and 15 percent. At the same time, there has been a decline of 13.6 percent in the total production of the eight core sectors between April and May. Aditi Nair, Chief Economist of ICRA, said that the growth in the core sector in the month of May has been seen due to the low base effect due to the second wave of Kovid 19 last year. That is, in the month of May last year, the growth was very less, so this year there has been a sharp jump in the growth of production. However, he said that the growth in the coal sector has remained steady. Last year also the production of coal had increased, while this year also it has seen good growth. He said that compared to the time before Kovid, the core index has registered a growth of 8.1 percent during May 2022.

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16-19 percent growth possible in May IIP

On the other hand, Nair estimated that the Index of Industrial Production (IIP) or factory output could achieve a growth of between 16 and 19 per cent in the month of May. According to him, the growth in the core sector will have an impact on IIP. Eight core sectors account for more than 40 percent of the IIP.