The output of eight core infrastructure industries shrank 6.5 per cent in March after touching an 11-month high in February as India imposed a nationwide lockdown to combat the spread of the Covid-19 pandemic. This is the sharpest fall since the series began in 2012, analysts said.

The contraction in output was because of a fall in the production of crude oil, natural gas, refinery products, fertiliser, steel, cement and electricity. The core sector had expanded 5.8 per cent in March 2019.

During the April-March 2019-20 period, the core industries recorded a 0.6 per cent growth against 4.4 per cent in 2018-19.

“The core sector contraction represents the worst performance in the current series, even though it is surprisingly not as deep as we had feared. Based on the contraction in the core sector, we expect industrial output to contract 15-20 per cent in March 2020,” Aditi Nayar of Icra said.

The core sector growth rate for March was going to be more significant for two reasons. First it was to reflect partly the impact of the lockdown for a week and, second, it would be a precursor to what one can expect in April.

“The IIP growth rate can be expected to be in the negative region for March given that the normal ramp up of production did not happen,” Madan Sabnavis, chief economist with Care Ratings, said.

With the lockdown in place throughout April 2020, which is expected to have severely curtailed production in many core sectors, the contraction in core sector output is likely to worsen to alarming levels in that month.

These contractions may have a bearing on the country's overall economic growth, which was estimated at 5 per cent in 2019-20.

Several multilateral agencies -- including the IMF and World Bank -- as well as rating agencies -- like Moody's, Fitch and S&P -- have significantly slashed India's growth projection for 2020-21 due to coronavirus outbreak.