The combined Index of Eight Core Industries  (ICI) has risen by 6.2 per cent in April 2024 against a low base of 4.6 per cent in the same month last year, according to the provisional figures released by the Ministry of Commerce and Industry.

The eight core sectors of the Indian economy, which provide crucial inputs to most segments of industry, are electricity, steel, refinery products, crude oil, coal, cement, natural gas, and fertilisers. These eight sectors have a combined share of 40.27 per cent in the Index of Industrial Production (IIP). 

Growth in industrial production has always been dependent on these eight sectors, hence the justification of earmarking them as ‘core’ sectors.

As mercury keeps on breaching the 50-degree Celsius mark in the capital city and other parts of the country, India’s peak power demand has already risen to a record 250 GW. It is likely to reach 260 GW this summer.

The April-June period last year saw relatively less hot weather. As a result, growth in electricity generation then was less than usual. But the tide has turned, and April 2024 electricity generation growth was reported at 9.4 per cent.

However, will this growth be sufficient to meet the rapidly rising power demand? Year-on-year growth in coal output dipped to 7.5 per cent in April 2024 from 8.7 per cent in March 2024. As additional coal supply is expected to generate more power, this is not good news.

Cement production increased by 0.6 per cent in April 2024, year-on-year. Steel production has grown by 7.1 per cent. These two are important infrastructure sectors and subdued growth (particularly in cement) is not a good way to start  the financial year.

Crude Oil production increased by 1.6 per cent in April 2024. Natural Gas production has grown by 8.6 per cent, and petroleum Refinery production increased by 3.9 per cent in April.

So, apart from a rise in natural gas production, the overall moderation in core sector growth also continues to affect the energy sector.

With this moderated growth of core sectors, industry watchers will closely monitor the manufacturing sector's performance for the next few quarters.