India Core Sector Growth Climbs to 7.9% in September on Strong Coal and Electricity Output

India's core sector growth reached 7.9% in September, marking an increase from 5.9% in August according to official data released on Wednesday by the Ministry of Commerce and Industry. This September output stands as the highest growth recorded in the new Index of Core Industries series, which uses 2022-23 as its base year.

Industry Breakdown

Out of the nine key industries tracked in the index, six showed expansion while the remaining three contracted during the month. Iron ore, electricity, coal, and refinery products served as the primary drivers of this growth. Iron ore output accelerated sharply to 18.4% in September after a 5.5% rise in August, continuing a pattern of double-digit growth seen in every month this year except February and August. Electricity generation, which holds the highest weight of 31% in the index, grew by 11.4%. Coal output expanded by 10.7% following a 3.8% contraction in the previous month. Refinery products, carrying the second-highest weight at 23%, posted a double-digit growth of 10.3% compared to 5.6% in August, while cement and steel grew by 4.9% and 9.8% respectively.

Sectoral Contractions and Fiscal Performance

Fertilisers, natural gas, and crude oil experienced contractions during the period. Fertilisers saw the deepest contraction at 11.7%, though this improved slightly from a 12.4% drop in the prior month, while natural gas and crude oil contracted by 4.6% and 1.4% respectively. On a broader scale, the overall index registered a cumulative growth of 5.1% for the current fiscal year covering April to September, doubling the 2.5% growth recorded during the same period in the previous year.

Context

The Index of Core Industries monitors the performance of critical infrastructure sectors that have a multiplier effect across the broader manufacturing and industrial economy. Steady increases in core outputs like electricity, coal, and steel typically point to sustained industrial demand and overall economic momentum in the country.