India’s core sector output rose sharply in April on the back of a low-base effect. The eight core sector industries grew at 56% in April.
The data also shows that the sequential decline in core sector output stood at 15% in April on account of the second wave of the virus.
“This high growth rate in April 2021 is largely due to low Index base in April 2020 consequent tothe low industrial production across all sectors caused by nationwide lockdown imposed to contain spread of Covid-19 last year. The month over month production of eight core industries, as captured by ICI, declined by 15.1per cent (P) in April 2021 compared to March 2021(P) due to emergence of second wave of infectious COVID-19,” the official release said.
The index which contributed 40% to the industrial output witnessed a contraction of 6.5 per cent in 2020-21.
The April figures have been high largely due to the base effect but may have been tempered by the impact of local lockdowns on economic activity.
A number of states started imposing local lockdowns to break the chain of transmission as the second wave of coronavirus began to spread quickly.
The finance ministry in its monthly economic report for April said that the second wave of the virus presents challenge to the ongoing recovery process.
The RBI in its annual report also acknowledged the impact of the second wave on the economic recovery process. However, it said that the impact may not be as harsh as in the first wave.
The containment measures took a toll on the recovery process that had gathered steam in the last quarter of the previous fiscal. The numbers for the same will be released today.
News source- Economic Times