Core industries production declines in May

The Dollar Business Bureau

The production of core industries in India dropped in May, after increasing consecutively for five months, due to decline in output in a few sectors, including cement and steel.

Index of Eight Core Industries (ECI), the measure to select factory production, which represents key infrastructure sectors, moved up a little  by 2.8 percent in the month of May in the wake of lower output of refinery products and electricity, revealed a data issued by the Ministry of Commerce and Industry.

In April 2016, the ECI had surged by 8.5 percent and 4.4 percent in the same month in 2015.

The index consists of 38 percent of the overall weightage of products that are included in the Index of Industrial Production (IIP).

In May 2016, the combined ECI index was at 183.7, as per the data issued by the Ministry of Commerce and Industry.

Under the ECI, coal and fertilisers industries witnessed positive output, while the output of crude oil, natural gas, refinery products, steel, cement and electricity decreased.

Electricity generation had the maximum weightage of 10.32 percent in the IIP. It increased by 4.6 percent in the month of May as compared to the same month of 2015.

The second most important item was steel which had a weightage of 6.68 percent. Steel production, has augmented by just 3.2 percent in the month of May.

Distilling of refinery products, the next most vital component in terms of weightage, inched up by 1.2 percent in the month under review, as against the corresponding month of previous year.

However, crude oil extraction, with a weightage of 5.21 percent in IIP, declined by 3.3 percent last month, whereas coal mining, having a 4.38 percent weightage, surged by 5.5 percent during the previous month.

Cement production, with a weightage of 2.41 percent, augmented by 2.4 during the month under consideration.

The sub-index for natural gas production, which has a weightage of 1.71 percent, dropped by 6.9 percent in May 2016.

However, the surprising factor was fertiliser manufacture, which has the lowest weightage of just 1.25 percent, but increased the highest among all the sub-indices. The output rose 14.8 percent in the month of May.