The output of eight core infrastructure sectors grew marginally by 0.1 per cent in January, backed by higher production of fertiliser, steel and electricity even as five other sectors contracted.

The core sector had expanded by 2.2 per cent in January 2020, according to the provisional data released by the commerce and industry ministry on Friday.

“The anaemic core sector growth is a concern as it has a weight of nearly 40 per cent on the IIP and reflects physical production that has now declined 8.8 per cent for the year. Therefore, while the monetary value added number has been positive the same does not hold here,” said Madan Sabnavis, chief economist of Care Ratings.

Aditi Nayar, principal economist of Icra said: “Based on the available data for the core sector, merchandise exports and auto output, we project the growth in IIP to remain subdued at 0.5-1.5 per cent in January 2021.”

Coal output contracted 1.8 per cent, crude oil 4.6 per cent, natural gas 2 per cent, refinery products 2.6 per cent and cement 5.9 in January. However, the output of fertiliser, steel and electricity in January grew 2.7 per cent, 2.6 per cent and 5.1 per cent, respectively.

Fiscal deficit

Fiscal deficit for the 10 months ended January stood at Rs 12.34 lakh crore or 66.8 per cent of the revised budgeted target for the whole fiscal.

The government has pegged the fiscal deficit for the current year at Rs 18.48 lakh crore, or 9.5 per cent of GDP.