The output of eight core sectors declined by 4.6 per cent in February, the steepest contraction in the last six months which experts said could drag the overall industrial production in the month into the negative territory.
All the key segments, including coal, crude oil, natural gas, and refinery products, witnessed a decline in production, according to the official data released on Wednesday.
The growth rate of the eight infrastructure sectors -- coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity -- stood at 6.4 per cent in February 2020.
Last time in August 2020, the sectors had recorded a negative growth of 6.9 per cent.
In January this year, the segments have registered a positive growth of 0.9 per cent.
According to the data, coal production declined by 4.4 per cent, crude oil by 3.2 per cent, natural gas by 1 per cent, refinery products by a steep 10.9 per cent, fertilisers by 3.7 per cent, steel by 1.8 per cent, cement by 5.5 per cent and electricity by 0.2 per cent in February.
According to commerce and industry ministry data, during April-February 2020-21, the eight sectors' growth declined by 8.3 per cent as compared to (+) 1.3 per cent in same period of the previous fiscal.
Commenting on the figures, ICRA Ltd Principal Economist Aditi Nayar said that given the sharp base effect, the core sector output is expected to expand by 9-11 per cent in March 2021, which should result in a modest growth of around 2 per cent in Q4 FY2021.
"The lead indicators such as the core sector, auto output and non oil exports have revealed a decidedly mixed trend for February 2021.
“Based on the available data, we expect the contraction in the IIP (index of industrial production) to deepen to 2-3 per cent in February 2021 from 1.6 per cent in January 2021," she said.
Photograph: Rupak De Chowdhuri/Reuters