Do you see any improvement in the core sector data announced for the month?

Core sector growth continued to show contraction for the sixth month in succession. For the month of August 2020 the core sector consisting of 8 key infrastructure industries in all, contracted by -8.5%. The intensity of the fall has been surely tapering.

Despite the sixth straight fall, there have been some positive developments that are visible. The core sector contraction for May 2020 was revised to -21.4% while the core sector contraction for July 2020 also improved to -8%. That was the good news on the growth front.

While infrastructure sectors appear to have reached nearly 90% of pre-COVID levels of output, it appears to be struggling to improve from there which can clearly be attributed to a combination of funding constraints, weak demand and supply chain bottlenecks.

There were some outperformers too within the core sector list. Coal and fertilizers were the two sectors to show positive growth in August on a YOY basis. The core sector is extremely critical to the overall scheme of things as it accounts for 40.27% of IIP.