The output of core industries in India broke the improvement trend and shrank more than the previous month in August 2020. Infrastructure output shrank 8.5 percent on-year in August, following a contraction of 8 per cent in July 2020, according to the Ministry of Commerce & Industry. It is to be noted that the cumulative growth during April-August 2020 has been -17.8 per cent. Coal, crude oil, natural gas, refinery products, cement, electricity, steel, and fertilizers together account for the core industries in India. All sectors showed a decline in production except fertilizers and coal.
The production of refinery products saw a maximum fall of 19.1 per cent in the month, followed by a 14.6 per cent fall in the production of cement and 9.5 per cent fall in the production of natural gas. Steel and crude oil production fell 6.3 per cent in the month while there was a 2.7 per cent fall in the production of electricity. The two sectors — coal and fertilizers — on the other hand, rose 3.6 per cent and 7.3 per cent respectively.
The output of core industries nosedived to a contraction of 37.9 per cent in the month of April 2020 when the government announced a nationwide lockdown to arrest the spread of coronavirus. However, the output started to increase in the subsequent months. August is the first month since May when the output growth was lower than the previous month. The picture of India’s industrial growth will be more clear with the release of the index for September 2020, scheduled on 29 October 2020.
Meanwhile, August figures on core industries’ output present a daunting picture of India’s economic revival. With more relief measures and lifting of lockdown restrictions in various parts of the countries, the health of industries was expected to improve, nevertheless, the scale of contraction in the industrial output presents a worrisome projection of the second quarter GDP results too.