The index of eight core industries rose 4.4 per cent in May 2015 to 178.6, compared to its level in May 2014, the fastest seen since November 2014, and follows two straight months of contraction.
The eight core industries — coal, crude oil, natural gas, refinery products, fertilisers, steel, cement, and electricity — account for a combined weight of 37.9 per cent in the overall IIP.
The refinery products industry grew the fastest, at 7.9 per cent in May 2015, compared to May 2014. This is far faster than the -2.9 per cent seen in April 2015. Coal production grew the second-fastest, at 7.8 per cent. However, this was marginally slower than the growth of 7.9 per cent registered in April.
Coming as welcome news to those fearing severe power outages this summer, electricity generation increased 5.5 per cent in May 2015 against -1.1 per cent in the previous month. Production was at 94,944 million Kwh in May 2015, compared to 89,995 million Kwh in May 2014 and 86,154 million Kwh in April 2015.
The growth of production of crude oil, fertilisers, and cement all entered the green in May 2015 from contracting in April. Crude oil production growth grew 0.8 per cent, while those of fertilisers and cement were at 1.3 per cent and 2.6 per cent, respectively.
The performance of the natural gas industry improved marginally, but it still contracted in May — this marks 54 consecutive months of contraction since December 2010. The industry’s output was -3.1 per cent lower than its performance in May 2014. It was -3.5 per cent in April.
The steel industry accelerated its growth by two percentage points to 2.6 per cent in May from 0.6 per cent in April.
These signs of revival in the core industries of the economy imply that the performance of the IIP in April 2015 — accelerating to 4.1 per cent from 2.5 per cent in March — was not a blip and that the economy really is showing signs of recovery, as regularly asserted by Finance Minister Arun Jaitley.
