Output in electricity sector, which constitutes 19.85% of the basket, grew 3 percentage points to 6.2% in the month under review.
| Photo Credit: SRIRAM M.A.
Core sector growth came in at 3.8% as electricity output increased due to early onset of summer in March. This compared with 3.4% rise in February, according to data from the Ministry of Commerce and Industry.
Output in electricity sector, which constitutes 19.85% of the basket, grew 3 percentage points to 6.2% in the month under review. “Electricity growth was at 6.2% with higher demand due to an early onset of summer characterised by the heat waves in several parts of the country. This came on top of 8.2% growth in March 2024,” wrote Madan Sabnavis chief economist at Bank of Baroda research in a note.
Although the headline number showed growth, the sectoral trends exhibited a mixed bag, as output in two sectors continued to shrink.
Crude oil output shrank for the third consecutive month contracting 1.9% in March against a steeper decline of 5.2% in the previous month. Natural gas output shrank for nine straight months with the steepest decline of 12.7% in March.
Cement, whose output grew a meagre 0.8 percentage points to 11.6%, was the only sector where the growth was in double digits. Steel output grew 7.1% in the month under review. “While most of the increase in production can be attributed to higher government spending during the end of the year, the fact that private sector investment announcements increased sharply in Q4 also supports this growth in demand for steel,” Mr. Sabnavis wrote.
While the monthly growth was an uptrend, the core sector output grew at 4.4% in fiscal 2025 down from 7.6% in the previous fiscal, the slowest in four years. Growth of output in almost all sectors slowed with two of them , crude oil and natural gas shrinking.
To be sure, core sector growth covers just 40.27% of the Index of Industrial Production (IIP). BoB research had forecast the IIP to come in at 4% to 4.5% in March.
Published – April 21, 2025 08:25 pm IST
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