Eight core industries registered a negative growth of 0.1 per cent in March, the lowest performance in 17 months, due to a steep decline in production of steel, cement and refinery products.
The output had expanded by 4 per cent in March 2014. The previous low logged by the core industries was in October 2013 at (-) 0.6 per cent.
The growth of eight core industries — coal, crude oil, natural gas, refinery products, fertiliser, electricity, steel and cement — was 1.4 per cent in February 2015.
For the full 2014-15 fiscal, the production growth of eight sectors also slowed down to 3.5 per cent, from 4.2 per cent in previous financial year ended in March, 2014.
“The stagnation in core sector output and contraction in merchandise trade … leading us to expect a moderation in industrial growth,” rating agency ICRA said.
The growth rate of core sector industries has been declining since November last year. It was 6.7 per cent in November 2014, which fell to 2.4 per cent in December 2014 and then to 1.8 per cent in January.
The eight sectors contribute 38 per cent to the overall industrial production, a parameter that the Reserve Bank takes into account while framing its monetary policy.
In March 2015, steel production declined by 4.4 per cent, cement output by 4.2 per cent, refinery products’ by 1.3 per cent and of natural gas by 1.5 per cent, according to the data released by the Commerce and Industry Ministry.
However, coal production rose by 6 per cent, crude oil by 1.7 per cent and fertiliser output by 5.2 per cent in the last month of 2014-15 fiscal.
Electricity generation grew by 1.7 per cent in March 2015 compared to 5.4 per cent in the same month last year.