The output of eight core sectors moderated to 4.3% YoY in Mar-22 from 5.9% in Feb-22. On sequential basis, the year-end seasonality pushed the index to 14.6% MoM in Mar-22 from a contraction of 5.2% in Feb-22. Nevertheless, the expansion was lower than the seasonal average of +16.2% recorded in the last three years. On a cumulative basis, the core sector has seen a healthy growth of 10.4% in FY22 vis-à-vis FY21, reflecting a good recovery from the pandemic disruption. Importantly, the cumulative output is modestly higher by 3.3% than the comparable pre-pandemic period in FY20. Except for crude oil and refined petroleum products, the other six segments of the core sector have shown moderate to healthy growth over FY22 vis-à-vis that in FY20, reinforcing the fact that the core sector has largely been able to attain normalization in its output despite multiple onslaughts of the pandemic waves.
Suman Chowdhury, Chief Analytical Officer, Acuité Ratings & Research said, "The spurt in prices of key commodities and importantly, the fresh supply chain bottlenecks triggered by the continuing Russia-Ukraine conflict are likely to slow down the revival in the industrial and core sector output in the near term. Nevertheless, we expect GDP growth for FY23 at 7.5% since government's strong thrust on infrastructure segment, solid coverage on vaccination, moderate recovery in rural consumption and the full play out of pent-up demand are likely to remain the major growth drivers."
Link to the report