India's Core Sector Growth Slows to 14-Month Low in Dec 2023

New Delhi, Jan 31 (PTI) The growth of eight key infrastructure sectors slowed to a 14-month low of 3.8 per cent in December 2023, on account of poor performance of sectors like crude oil, electricity, steel and cement, according to the official data released on Wednesday.

The core sector (coal, crude oil, natural gas, refinery products, fertiliser, steel, cement and electricity) growth in November was 7.9 per cent.

It was 8.3 per cent in December 2022. The last low was recorded at 0.9 per cent in October 2022.

The growth of eight sectors was flat at 8.1 per cent year-on-year in the April-December 2023-24.

The growth rate in the production of coal, refinery products, fertiliser, steel, cement and electricity decelerated during December 2023.

Only natural gas output rose by 6.6 per cent during the month under review from 2.6 per cent in December 2022.

These numbers assume significance as the eight core sectors contribute 40.27 per cent to the Index of Industrial Production (IIP).

Crude oil output dipped by 1 per cent in December last year.

The growth rate in the production of electricity, steel and cement slowed to 0.6 per cent, 5.9 per cent and 1.3 per cent in December 2023 against 10.4 per cent, 12.3 per cent and 9.5 per cent, respectively, in December 2022.

Aditi Nayar, Chief Economist, Head - Research & Outreach, Icra Ltd, said the core sector expansion halved to a 14-month low.

"Following the tepid core sector growth in December 2023, we project the IIP (Index of Industrial Production) expansion for that month at a bleak 1-3 per cent," she said.