Electricity Current Affairs - 2019
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The growth rate eight core sectors which include coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity witnessed a decline as per the data from the Ministry of Commerce and Industries.
Reduced growth rate of Core Sector
- The core sector which had witnessed a 6.2% growth in January 2018 witnessed a growth rate of 1.8 % in January
- The decline in the output of crude oil, refinery products and electricity pulled down the growth of eight core sectors to 1.8 %.
- The declining trend which has been witnessed since October 2018 suggests continued weakness in industrial activities and a weak second half economic growth in the financial year 2018-19.
- Production of crude oil, refinery products and electricity contracted 4.3%, 2.6% and 0.4%, respectively.
- Coal and cement output slowed to 1.7% and 11% in January as against 3.8% and 19.6% in January 2018, respectively.
- Natural gas, fertilisers and steel output grew 6.2%, 10.5% and 8.2 % respectively.
- Higher fertiliser growth has been attributed to the negative base effect last year.
Sluggish core sector growth would impact the Index of Industrial Production (IIP) as these segments account for about 41 per cent of the total industry output.
The Index of Industrial Production for the month of November has been released by the Central Statistical Office, under the Ministry of Statistics and Programme Implementation.
The Index of Industrial Production (IIP) provides details about the growth of various sectors in an economy such as mineral mining, electricity and manufacturing. IIP is a composite indicator that measures the short-term changes in the volume of production of a basket of industrial products during a given period with respect to that in a chosen base period.
Key Facts about the IIP, November 2018
The IIP report of CSO makes the following observations:
- Industrial growth unexpectedly plummeted to a 17-month low in November as a result of the post-festival season decline in manufacturing, fewer working days in the month and tighter financial conditions.
- The Index of Industrial Production (IIP) stood at 0.47 per cent in November and the high base of last year has also contributed to the slowdown. IIP had witnessed a growth of 8.5 per cent in November 2017.
- Manufacturing which constitutes 77.63 per cent of IIP, shrank 0.4 per cent, the Manufacturing had witnessed a robust growth of 10.4 per cent in November 2017.
- The production of both capital goods and consumer goods saw a decline.
- Mining expanded by 2.7 per cent in November 2018 compared with 1.4 per cent in November 2017.
- The electricity generation rose 5.1 per cent.
- The Production of intermediate items was down 4.5 per cent.
The Industrial growth in India is still not on a sound footing due to the high variability in industrial growth across sectors and within sectors on a month-on-month basis. It is expected that incrementally improving liquidity, normalisation after festive season related disruptions and spending tied to elections would act as a catalyst for the growth.