After the festive season, the lower demands amidst supply disturbances in parts of southern India due to heavy rainfall have eased the growth rate of India’s eight major industries in November, on a sequential basis.

The Index of Eight Core Industries’ (ICI) readings for last month showed a slower rate of expansion at 3.1 percent (provisional) from a rise of 8.4 percent (provisional) reported for October 2021.

However, on a year-on-year basis, the ICI reading during the period under review was higher than (-) 1.1 percent reported for November 2020.

The ICI index comprises 40.27 percent of the weight of items included in the Index of Industrial Production (IIP), comprising coal, crude oil, natural gas, refinery products, fertilisers, steel, cement, and electricity.

“The production of coal, natural gas, refinery products, fertilisers, steel, and electricity industries increased in November 2021 over the corresponding period of last year,” a Ministry of Commerce and Industry statement said.

“Final growth rate of Index of Eight Core Industries for August 2021 is revised to 12.2 percent from its provisional level 11.6 percent. The growth rate of ICI during April-November 2021-22 was 13.7 percent (P) as compared to the corresponding period of last FY.”

On a sector-specific basis, the output of coal, which has a weightage of 10.33 percent in the index, showed a growth of 8.2 percent in November 2021 over the same month of the previous year.

Similarly, the output of refinery products, which has the highest weightage of 28.04 percent, rose by 4.3 percent, compared to the corresponding month of the last fiscal.

Electricity generation, which has the second-highest weightage of 19.85 percent, inched up by just 1.5 percent, whereas steel production was up by just 0.8 percent last month.

However, the extraction of crude oil, which has a weightage of 8.98 percent, declined by 2.2 percent during the month under consideration, though the sub-index for natural gas output, with a weightage of 6.88 percent, rose by 23.7 percent.

Cement production, which has a weightage of 5.37 percent, declined by 3.2 percent in the month under review.

Fertilizer manufacturing, which has the least weightage — only 2.63 percent — increased by 2.5 percent.

ICRA Chief Economist Aditi Nayar said: “Core sector growth deflated to a lower than expected 3.1 percent in November 2021 from the revised 8.4 percent in October 2021, adding further evidence that the momentum slackened after the festive season amidst supply disruptions in parts of southern India related to heavy rainfall.

“The slowdown was pervasive across six of the eight core sectors, with cement output slipping into a YoY contraction. Moreover, the YoY growth of only fertiliser output recorded a rise in November 2021 relative to the previous month, as rabi sowing progressed.”