India's core industries experienced a growth of 4% in December 2024, a slight decline from the 4.4% growth recorded in November. This data, released by the Commerce Ministry on January 31, indicates that while the core sector continues to expand for the fourth consecutive month, the pace of growth has moderated compared to previous months.

Coal Production: Increased by 5.3%, down from 7.5% in November. This reflects a continued demand for coal, essential for electricity generation and industrial processes.

Steel Production: Rose by 5.1%, an improvement from 4.4% in November, indicating robust activity in construction and manufacturing sectors.

Electricity Generation: Also grew by 5.1%, up from 4.4%, suggesting strong energy demand amidst ongoing economic activities.

Cement Production: Saw a significant slowdown, growing only by 4% compared to a much higher 13.5% in November, which may signal challenges in the construction sector.

Crude Oil Output: Marginally increased by 0.6%, recovering slightly from a contraction of 2.1% in the previous month.

Natural Gas Production: Continued to decline, with a drop of 1.8%, highlighting ongoing challenges in this sector.

Refinery Products And Fertilizers: Recorded growths of 2.8% and 1.7%, respectively, although these figures also reflect a slowdown compared to previous months.

Economic Implications

The core industries constitute about 40% of India's industrial output, making their performance critical for overall economic health. The moderation in growth could have repercussions on the Index of Industrial Production (IIP), which is closely monitored by policymakers and economists alike. Recent trends suggest a broader economic slowdown, with GDP growth slowing to a seven-quarter low of 5.4%, prompting revised forecasts for future economic expansion.

While some sectors like coal, steel, and electricity are showing positive growth, the significant decline in cement production raises concerns about future infrastructure development and economic momentum as India aims for higher growth targets in the coming fiscal years.

ANI