Output of eight core industries rises in August

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New Delhi, Oct 3: Output of India's eight major industries expanded exponentially in August by 4.9 per cent from a rise of 2.6 per cent during the previous month, official data showed on Tuesday. The Index of Eight Core Industries (ECI), representing the output of major industrial sectors like coal, steel, cement and electricity, had risen by 3.1 per cent in the corresponding month of the previous year. The ECI index carries 40.27 per cent weightage of the Index of Industrial Production (IIP) which is the macro-gauge for India's factory output.  "The combined Index of Eight Core Industries stands at 123.6 in August, 2017, which was 4.9 per cent higher compared to the index of August, 2016," the Ministry of Commerce & Industry said in the summary of the ECI for August. "Its cumulative growth during April to August, 2017-18, was 3 per cent." On a sector-specific basis, refinery production, which has the highest weightage of 28.03 per cent, grew by 2.4 per cent in August 2017 as compared with the corresponding month of last year. Electricity generation, which has the second highest weightage of 19.85, rose by 10.3 per cent. Steel production, the third most important component with weightage of 17.92, increased by 3 per cent during the month under review, while coal mining, with a 10.33 weightage, rose by 15.3 per cent in August 2017. However, extraction of crude oil, which has an 8.98 weightage, slipped by 1.6 per cent during the month under consideration. On the other hand, the sub-index for natural gas output, with a weightage of 6.88, stood higher by 4.2 per cent. Conversely, cement production, which has a weightage of 5.37, decreased by 1.3 per cent in August 2017. Similarly, fertiliser manufacturing, which has the least weightage -- of only 2.63 -- dipped by 0.7 per cent. Another key macro-economic data point -- the Nikkei India Manufacturing Purchasing Managers Index (PMI) -- released earlier in the day showed that the country's manufacturing sector expanded marginally in September.  The composite indicator of manufacturing performance, stood at 51.2 in September due to stronger domestic demand. An index reading of above 50 indicates an overall increase in economic activity and below 50 an overall decrease. "September data painted an encouraging picture as the sector continued to recover from the disruptions caused by the introduction of the GST in July," said Aashna Dodhia, Economist at IHS Markit and author of the report. "This sustained amelioration reflected expansions in new work and output, supported by stronger domestic demand conditions. Subsequently, business confidence strengthened among manufacturers as they reportedly anticipate long-term benefits from recent government policies."

IANS