India’s core industries, essential components of the Index of Industrial Production (IIP), showed varying performances in March 2024. According to the Ministry of Commerce and Industry, the growth rate reached 5.2% year-on-year, which, although slightly lower than the previous month, indicates sustained industrial activity. This level of growth presents important trends for strategic insights and policy formulation.
Cement, Coal, Electricity, Natural Gas and Steel shines
The cement and electricity sectors have exhibited substantial growth. Cement production soared by 10.6%, propelled by a significant rise in construction activity, supported by widespread industrial demands and extensive government infrastructure projects. Similarly, electricity generation achieved an eight-month peak, climbing by 8%, driven mainly by increased demands from the residential and agricultural sectors during the warmer summer months.
Moreover, the coal, natural gas and steel sectors have also performed well, with coal production up by 8.7%, natural gas growing by 6.3%, and steel production increasing by 5.5% year-over-year. These positive results underscore these sectors’ pivotal role in bolstering India’s industrial output.
Performance of Core Sectors (Month on Month)
| Sectors | Feb-24 (%) | Mar-24* (%) |
| Coal | 11.6 | 8.7 |
| Crude Oil | 7.9 | 2 |
| Natural Gas | 11.3 | 6.3 |
| Refinery Products | 2.6 | -0.3 |
| Fertilizers | -9.5 | -1.3 |
| Steel | 9.1 | 5.5 |
| Cement | 9.1 | 10.6 |
| Electricity | 7.5 | 8 |
| Overall Index | 7.1 | 5.2 |
Source: Ministry of Commerce & Industry
* Provisional
Challenges in the Fertilizer and Refinery Sectors
In contrast, the fertilizer and refinery sectors have encountered notable difficulties. The fertilizer sector continues to grapple with challenges such as reliance on imported raw materials, unbalanced nutrient application, and the heavy financial impact of subsidies. These issues require urgent attention and policy intervention to ensure the sector’s sustainability and efficiency. On the other hand, the refinery sector faces significant vulnerabilities due to its sensitivity to global crude oil price swings, which can dramatically affect profitability and the cost competitiveness of its products. Strategic measures are crucial to fortify these sectors and secure their valuable economic contributions.
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How was the year for the core sectors
For the fiscal year 2024, the core sectors recorded a positive growth rate of 7.5%. Steel led this growth by 12.3%, followed by coal and cement. This indicates a robust industrial foundation.
Targeted measures could further enhance sector-specific performances. Stimulating demand in the automotive sector could boost steel production while aligning fertilizer production with agricultural cycles could optimize outputs and reduce inefficiencies.
Performance of Core Sectors (Year on Year)
| Sector | 2022-23 (%) | 2023-24* (%) |
| Coal | 14.8 | 11.7 |
| Crude Oil | -1.7 | 0.6 |
| Natural Gas | 1.6 | 6.1 |
| Refinery Products | 4.8 | 3.4 |
| Fertilizers | 11.3 | 3.7 |
| Steel | 9.3 | 12.3 |
| Cement | 8.7 | 9.1 |
| Electricity | 8.9 | 7 |
| Overall Index | 7.8 | 7.5 |
Source: Ministry of Commerce & Industry
* Provisional
Future Outlook
The performance of these core sectors is pivotal for India’s broader industrial growth. India can sustain robust growth in its core industries by addressing challenges and leveraging strengths, such as the expanding infrastructure sector. This proactive approach will not only enhance the overall IIP but also support sustained industrial advancement. The continued growth in March underscores the importance of timely adjustments and strategic interventions to ensure comprehensive growth across all core sectors.
By Anamika Singh, Asst. Professor & BMS Coordinator, Sainath Education Trust’s Rajiv Gandhi College of Arts, Commerce and Science.
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