According to the provisional data released by the Commerce and Industry Ministry (CIM), the output of eight core infrastructure sectors contracted for the third month in a row by 1.3 per cent in December 2020, dragged down by poor show by crude oil, natural gas, refinery products, fertilizer, steel and cement sectors. The core sectors had expanded by 3.1 pc in December 2019.

Except for coal and electricity, all sectors recorded negative growth in December 2020. During April-December 2020-21, the sectors' output declined by 10.1 pc against a growth rate of 0.6 pc in the same period of the previous year. The output of crude oil, natural gas, refinery products, fertilizer, steel and cement declined by 3.6 pc, 7.2 pc, 2.8 pc, 2.9 pc, 2.7 pc, and 9.7 pc, respectively.

The growth in coal production slowed down to 2.2 pc in the month under review from 6.1 pc in the same month last year. However, electricity output grew by 4.2 pc in December 2020. The eight core industries constitute 40.27 pc of the Index of Industrial Production. The government also revised core sector output data for September 2020 showing a growth rate of 0.6 pc in the month against the earlier projection of 0.1 pc contraction.

Commenting on the data, ICRA Principal Economist Aditi Nayar said that discouragingly, the core index continued to contract for the third consecutive month in December 2020. "Based on the plateau in the core sector data, juxtaposed with the uptick in auto production trends and recovery in non-oil merchandise exports, we expected the IIP to rebound to a modest growth of 0.5-1.5 pc in December 2020, trailing the level seen in October 2020," she said.

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