Lockdown woes: 8 core sector output drops by record 38.1% in April

Production of coal, crude oil, natural gas, refinery products, fertiliser, steel, cement and electricity contracted.

The record contraction in the growth rate of eight core sectors will affect the Index of Industrial Production.

The output of eight core infrastructure industries plunged by a record 38.1 per cent in April as the nationwide lockdown to contain coronavirus pandemic caused a substantial loss of production across sectors.

The production of coal, natural gas, refinery products, steel, cement and electricity contracted in double digits in the month, according to official data released on Friday.

The eight core sectors had expanded by 5.2 per cent in April 2019 while in March 2020 the sectors had contracted by 9 per cent.

"In view of nationwide lockdown during April 2020 due to COVID-19 pandemic, various industries - coal, cement, steel, natural gas, refinery, crude oil etc experienced substantial loss of production," the commerce and industry ministry said in a statement.

Production of coal, crude oil, natural gas, refinery products, fertiliser, steel, cement and electricity contracted by 15.5 per cent, 6.4 per cent, 19.9 per cent, 24.2 per cent, 4.5 per cent, 83.9 per cent, 86 per cent, 22.8 per cent, respectively.

During 2019-20, core industries recorded 0.6 per cent growth against 4.4 per cent in 2018-19.

The record contraction in the growth rate of eight core sectors will affect the Index of Industrial Production (IIP).

These sectors account for about 40.27 per cent of the IIP.

Commenting on the numbers, Icra vice-president Aditi Nayar said while the lockdown contributed to a broad-based contraction across eight core sectors, it had a differential impact on the extent to which activity was curtailed in the various constituents.

"While data on automobile production has not been explicitly released for April 2020, the output is likely to have been close to zero as most plants were shut for a large part of the month during the lockdown," Nayar said.

"Based on the available trends, we anticipate a contraction of 75-80 per cent in industrial output in April 2020, led by a collapse in manufacturing volumes of non-essential items amid the lockdown, moderate decline in electricity demand and a relatively insulated mining sector," she added.

The outbreak of the virus has also impacted the country's exports growth, which dipped by a record low of 60.28 per cent in April.

Photograph: Rupak De Chowdhuri/Reuters