Core sector output shrinks 6.5% in March as Covid-19 takes its toll on the economy

The Covid-19 pandemic and the lockdown has taken a toll on India’s core sector growth with the index nosediving into the negative territory for the month of March.

The eight core sector industries shrank 6.5 per cent in March compared to 5.8 per cent growth witnessed in the same period last year.

The output degrowth is in line with expectations of Indian economy crawling in the current fiscal owing to the 40-day lockdown which will be in place till May 3.

The core sector index was pulled down by massive de-growth seen in steel, fertilizers and cement output. The contraction in core sector output will be reflected in the Index of Industrial Production as it comprises 40.27 per cent of the IIP index.

Production of crude oil, natural gas, refinery products, fertiliser, steel, cement and electricity contracted by 5.5 per cent, 15.2 per cent, 0.5 per cent, 11.9 per cent, 13 per cent, 24.7 per cent and 7.2 per cent respectively in the month under review, official data showed.

The growth rate of coal production declined to 4.1 per cent in March from 9.1 per cent in March 2019.

During the April-March 2019-20 period, core industries recorded 0.6 per cent growth against 4.4 per cent in 2018-19.

(With inputs from PTI)