Impact of the note ban seems to be weighing on industrial output with core sector growth decelerating to 4.9 percent in November 2016 as against 6.6 percent in the previous month. However on an annual basis, the eight core sectors reported healthy growth over November 2015 figure of 0.6 percent.
The growth rate of eight infrastructure sectors – coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity – which contribute 38 percent to the total industrial production, expanded 4.9 percent in April-November 2016 compared to 2.5 percent growth in the same period last financial year, according to data released by the commerce and industry ministry on Monday.
Commenting on the data, rating agency ICRA said while the favourable base effect and healthy production in the core and other organised sectors may support the growth of the index of industrial production in November 2016, "the early evidence of the impact of the note ban on several unorganised sectors appears to be negative".
Coal, steel, electricity production jumped 6.4 percent, 5.6 percent and 10.2 percent, respectively.
Refinery and cement output growth stood at 2 percent and 0.5 percent, respectively, in November 2016, against 1.7 percent and (-)1.7 percent in November 2015.
However, crude oil and natural gas production contracted by 5.4 percent and 1.7 percent, respectively.
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