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India’s economy: On a strong foundation

Anu P. Mathai, IES, Chief Executive Officer, IBEF

Nov 09, 2016 13:48

India's core sector output index grew by 5 per cent year-on-year at 176.1 in September 2016, as compared with 3.2 per cent year-on-year growth recorded in August 2016, according to the recently released data from the Ministry of Commerce and Industry. It is important to note here that the Eight Core Industries (Coal, Crude Oil, Natural Gas, Natural Gas, Refinery Products, Fertilizers, Steel, Cement and Electricity) comprise close to 38 per cent of weight of items included in the Index of Industrial Production (IIP). On a cumulative level, the core sector output index has registered a growth of 4.6 per cent at 177.7 during April-September 2016 as compared to 169.9 in the same period last year.

The core sector index has registered positive growth for 10 months in a row now and sectors like petroleum refinery production, steel and cement were the top performers for the month of September 2016. For instance, petroleum refinery production grew year-on-year by 9.3 per cent in September, 2016 and 7.9 per cent during April-September 2016. Similarly, steel production increased by 16.3 per cent in September and 7.2 per cent during April-September 2016 and cement production increased by 5.5 per cent in September and 4.5 per cent during April-September 2016.

The consistent growth in India’s core sector growth is a testimony towards the strong foundation of India’s economic growth. In fact, industry watchers believe that if the core sectors are able to continue on the robust growth path for the coming months as well, the ripple effects of this momentum will give direct and indirect benefits to the other sectors of the economy.