Wednesday, 09 Oct, 2024
By: Yash Gupte
The combined Index of Eight Core Industries (ICI) increased by 8.0 percent (provisional) in JuLY 2023 as compared to the Index of July 2022. Image Source: IANS
According to figures released by the Ministry of Statistics and Programme Implementation on Thursday, August 31, India's gross domestic product (GDP) for the first quarter—that is, the April-June quarter of the current fiscal year accelerated to 7.8 percent
According to the data released by the Ministry of Commerce and Industry, The combined Index of Eight Core Industries (ICI) increased by 8.00 percent (provisional) in July 2023 as compared to the Index of July 2022. In July 2023 compared to the same month the previous year, more steel, coal, cement, refinery products, natural gas, fertilisers, and electricity were produced. Coal, crude oil, natural gas, refinery products, fertilisers, steel, cement, and electricity are the eight core industries that ICI tracks individually and together. The Eight Core Industries comprise 40.27 percent of the weight of items included in the Index of Industrial Production (IIP).
India’s GDP growth in the Q1 of the current financial year has brought cheers to the Indian market. According to figures released by the Ministry of Statistics and Programme Implementation on Thursday, August 31, India's gross domestic product (GDP) for the first quarter—that is, the April-June quarter of the current fiscal year accelerated to 7.8 percent.
The GDP growth rate in the final quarter of the previous fiscal year was 6.1 percent.
Even though this is less than the 13.5 percent GDP growth in the first quarter of the previous year, India's economy has been expanding steadily and is anticipated to continue to do so throughout the upcoming festive season.
In comparison to July 2022, coal production (weight: 10.33 percent) grew by 14.9 percent in July 2023. From April through July 2023–2024, its cumulative index climbed by 10.1 percent compared to the same period the year before. Talking about the production of crude oil (weight: 8.98 percent), it increased by 2.1 percent in July 2023 as compared to the same period in the previous year. Though its production increased, the cumulative index declined by 1 percent during April-July 2023-24.
Natural Gas production (weight: 6.88 percent) increased by 8.9 percent in July, 2023 over July, 2022. Its cumulative index increased by 2.3 percent during period from April-July, 2023-24 over the corresponding period of previous year. Petroleum Refinery production (weight: 28.04 percent) increased by 3.6 percent in July, 2023 over July, 2022. Its cumulative index increased by 2.3 percent during the quarter April to July, 2023-24 over the corresponding period of previous year.
Source: Ministry of Commerce and Industry
In comparison to July 2022, fertiliser production (weight: 2.63 percent) grew by 3.3 percent in July 2023. In comparison to the same period in the previous year, its cumulative index rose by 9.1 percent during the period from April to June 2023-24. In comparison to July 2022, steel production (weight: 17.92 percent) grew by 13.5 percent in July 2023. From April to July 2023–2024, compared to the same time the year before, its cumulative index rose by 15.3 percent.
Cement production (weight: 5.37 percent) increased by 7.1 percent in July, 2023 over July, 2023. Its cumulative index increased by 11.2 percent during April to July, 2023-24 over the corresponding period of previous year. In comparison to July 2023, electricity generation (weight: 19.85 percent) grew by 6.9 percent in 2023. Compared to the same quarter the previous year, its cumulative index jumped by 2.7 percent during the period from April to June 2023-24.
Source: Ministry of Coal
Source: Ministry of Coal
Source: Ministry of Coal
Talking about the production of coal, India’s coal production increase by 8.4 percent to 223 MT in Q1 of FY2023-24. When compared to Q1 of FY 2022–23, when the overall coal production was 205.65 million tons (MT), it has significantly increased to 222.93 MT. Production at Coal India Limited (CIL) increased by an amazing 9.85 percent in FY 2023–2024, from 159.63 MT in the same time the previous year to 175.35 MT. In FY 23–24, captive mines/others saw an increase of 4.74 percent, reaching 30.48 MT, up from 29.10 MT in FY 22–23 over the same period. These successes have contributed to the industry's general upward trend. The Ministry of Coal has set a target of producing 1 billion ton of coal in FY2023-24, a 13 percent growth year-on-year. Recently, India added another feather to its cap as the FY 2022-23 recorded the highest ever domestic production of coal.
The Ministry of Coal has achieved a substantial surge in overall coal production during the month of July 23, reaching 68.75 Million Tonne (MT), surpassing the figures of 60.25 MT of the month July 22, representing an increase of 14.11 percent. The production of Coal India Limited (CIL) has increased to 53.63 MT in the month of July 23 as compared to 47.29 MT in July 22 with the growth of 13.41 percent.
Source: Ministry of Steel
India has been eyeing to boost its steel production for a long period of time. Recently, the Union Minister for Steel and Civil Aviation, Jyotiraditya Scindia announced that India has emerged as the second largest producer of steel in the world. The government aims to double the country's annual crude steel making capacity to 300 MT from 125 MT at present. The production of steel in 2018-19 was recorded at 110.92 MT. The production had dropped to 103.54 MT in 2020-21. The reason behind the drop can be attributed to the pandemic which brought the whole nation to a standstill as nationwide lockdowns were imposed to contain the spread of COVID-19.
Among the states, Odisha is the largest producer of steel followed by Jharkhand and Chhattisgarh. Odisha produced 23.24 MT of steel in 2021-22. Jharkhand accounted for a total production of 17.09 MT followed by Chhattisgarh (14.90 MT). More than 80 percent of the country’s reserves are in the states of Odisha, Jharkhand, West Bengal, Chhattisgarh and the northern regions of Andhra Pradesh. Bhilai (Chhattisgarh), Durgapur (West Bengal), Burnpur (West Bengal), Jamshedpur (Jharkhand), Rourkela (Odisha), Bokaro (Jharkhand) are some of the important steel producing centres in India.
Coming over to crude oil, there has been a decline in the production of the commodity due ot various factors. One of the important factors is that India has been importing crude oil at very cheap rates from Russia and therefore it is very profitable and pragmatic for India to import the oil rather than produce it at a high cost. According to Hardeep Singh Puri, minister of petroleum and natural gas, profits for Indian Oil Corporation Limited grew from Rs 1,313 crore in 2019–20 to Rs 24,184 crore in 2021–20. Similar to this, the Bharat Petroleum Corporation Limited (BPCL) registered a profit of Rs 8,789 crore in 2021-2022 as opposed to Rs 2,683 crore and Rs 19,042 crore in 2020-21 and 2019-20, respectively. In just three years, Hindustan Petroleum Corporation Limited (HPCL) has seen a nearly threefold growth in earnings. The company's earnings increased to Rs 6,383 crore in 2021-22 from Rs 2,637 crore in 2019-20.
Source: Ministry of Petroleum and Natural Gas
India produces less than one-fifth of its oil requirements and imports the rest. But even the meagre amount of oil produced in the nation is falling off every year. In 2014–15, India produced 37.5 million tons of its own oil, but by January 2021, that production had dropped to just 25.6 million tons. In the past, the government has attributed the decline in oil production on depleted fields and reservoir issues. However, there are a lot of additional factors causing the slide. According to a report by Care Ratings, the Covid-19 pandemic's technical disruptions, well closures, and delays in field development efforts are the reasons behind India’s declining crude oil production.
In the last five years, from 2016 to 2021, the Indian fertiliser market grew by 22.6 percent. The country's production of fertilisers, however, only increased by a meagre 3.78 percent, increasing its reliance on imports, which increased by 48.22 percent in FY 2020–21 from FY 2016–17. The most widely used fertiliser in India is urea, which accounts for 57 percent of all key fertilisers (Urea, Di-ammonium Phosphate (DAP), Muriate of Potash (MOP), and Nitrogen, Phosphorous, and Potassium) (NPK).
Source: Ministry of Chemical and Fertilisers
The central government has been focusing on minimizing the import of fertilisers and increasing the domestic production of fertilisers. Five large-scale capacity fertiliser production plants (Ramagundam, 3 HURL Plants Gorakhpur, Barauni & Sindri and Matix) are planned by the government which will guarantee to decrease imports by 6.35 million tons. DAP is the major consumed fertilizer in India after Urea and NPK.
