Economy & Market

Core sectors contract in July by 9.6%

Published

6 years ago

January 9, 2020

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During April-July 2020, the core sector output has contracted by 20.5 per cent as against the 3.2 per cent growth during the same months of FY20, which can be ascribed to the coronavirus pandemic induced nation-wide lockdown that brought production activities to a near standstill.

For fifth successive month, the output of eight core sectors contracted in July 2020 by 9.6 per cent when compared with the 2.6 per cent growth witnessed in the same month of the previous year. However, on a sequential basis, the output of eight core sector increased for fourth month a row and improved when compared with 12.9 per cent decline in June 2020. The partial increase in the output in the month of July 2020 can in part be ascribed to further relaxations in the lockdown restrictions permitted under Unlock 2.0. However, localised lockdowns imposed by states in certain parts have weighed on the output during the month. In the month of July 2020, barring fertilizers, all other industries have recorded a de-growth (yoy per cent).

The final index for April 2020 has been revised lower as a result of which the growth has been revised lower at -37.9 per cent as against -37 per cent (provisional). For June 2020, output growth has been revised higher to -12.9 per cent v/s -15 per cent (provisional).

Key highlights:
Coal production declined by 5.7 per cent in July 2020 at a faster pace than the 1.6 per cent contraction in July 2019. However, when compared with June 2020 coal production has improved considerably (-15.5 per cent in June 2020). The partial resumption of industrial activities has led to increase in coal production. However, high inventory pile up and low pick up of coal stocks by electricity generation companies and monsoon season has weighed on coal production during the month.’

Production of crude oil contracted for the 4th successive month in July 2020 by 4.9 per cent on account of delay in production activities due to lockdown restrictions, non- availability of electric submersible pump (ESPs), delay in installation of new platforms, rise in water cut in wells & decline in total liquid production of wells, loss of oil production due to bandh/blockade by local people after the blow out at Baghjan and nearby areas.

Natural gas production declined for 16 months successively in July 2020 by 10.2 per cent as against 0.5 per cent de-growth in the same of last year. Delay in production activities due to lockdown, lower production from Vasistha/S1 wells due to surface issues and restricted/ no gas off take by consumers in onshore due to Covid-19 situation and shutdown at consumers’ end weighed on production. Refinery production, having higher weightage in eight core, contracted at a double digit pace of 13.9 per cent higher than -0.9 per cent in July 2019 owing to lower demand in domestic and global markets due to impact of Covid-19 lockdown and ongoing monsoons.

Output of steel sector decreased at a double digit rate for fifth month in a row by 16.4 per cent compared with the 8.1 per cent growth in July 2019. It can be ascribed to subdued construction activities owing to monsoon and lockdown restrictions, low demand from auto sector with high inventories and muted demand.

Cement production witnessed a dip by 13.5 per cent, a successive de-growth for fifth month, due to subdued construction activities and high inventories in the real estate sector. The increased demand seen from the rural sector too moderated as the coronavirus infections penetrated in the rural India as well.

Output of fertilizers grew by 6.9 per cent in July 2020, higher than 1.5 per cent growth in July 2019 and 4.2 per cent in June 2020 as it was less affected by the shutdown and production continued as demand from agriculture was high. This demand along with replacement of stocks in advance for the rabi sowing later in October-November has partly contributed to this increase in production.

Electricity production fell by 2.3 per cent as against the 5.2 per cent growth witnessed in July 2019. On a sequential basis, however, it was higher than the 10 per cent contraction seen in the previous month. This reflects resumption of industrial and business activity leading to pick up in commercial demand which again gets reflected in similar patterns witnessed in coal.

CARE Ratings’ View
In August 2020, further relaxation was permitted which is expected to push up the production by various key sectors during the month. The output thus may improve further in the eight core sector. Given the relationship between core sector growth and IIP growth (i.e., 40 per cent weightage of core sectors in IIP), the latter may be expected to be in the region of -12 to 14 per cent.

Courtesy: CARE Ratings

The article is authored by: Dr. Rucha Ranadive, Economist Email: rucha.ranadive@careratings.com | 91-22-68374348

Concrete

Cement Makers Reaffirm Commitment to Sustainable Growth

Published

2 days ago

June 5, 2026

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World Environment Day spotlight on innovation and circularity

On World Environment Day, the Indian cement industry reiterated its commitment to supporting India’s climate ambitions through sustainable manufacturing, resource efficiency and the adoption of cleaner technologies.

The Cement Manufacturers’ Association (CMA) said the sector remains aligned with the Government of India’s Net Zero commitments and is accelerating efforts to reduce its environmental footprint while supporting the country’s infrastructure and development agenda.

Parth Jindal, President, CMA and Managing Director, JSW Cement, said the industry is increasingly adopting cleaner technologies, improving energy efficiency and expanding the use of alternative fuels and raw materials. He also highlighted the growing importance of circular economy practices, where industrial by-products and waste streams from one sector are utilised as resources in another.

“The Indian Cement Industry is aligned to the Government’s commitments on carbon mitigation and is accelerating the adoption of cleaner technologies, resource efficiency and circular economy practices while actively exploring the potential of Carbon Capture, Utilisation and Storage (CCUS) as a critical pathway for deep decarbonisation,” said Jindal.

He added that coprocessing industrial waste and by-products helps conserve natural resources, reduce disposal requirements and lower the environmental footprint across multiple sectors.

According to Jindal, sustainability is no longer limited to manufacturing processes but is increasingly influencing investment decisions, innovation strategies and long-term growth plans within the industry.

Echoing similar views, Dr Raghavpat Singhania, Vice President, CMA and Managing Director, JK Cement, said sustainable development extends beyond emissions reduction and must also focus on responsible resource utilisation and waste minimisation.

“Sustainability in the built environment cannot be measured by emissions alone. It is equally about how efficiently we use resources, how effectively we minimise waste and how responsibly we create the infrastructure that will serve future generations,” said Singhania.

He noted that the cement industry is advancing its sustainability agenda through greater resource efficiency, increased circularity, technological innovation and continuous improvements in manufacturing practices. As a key contributor to India’s infrastructure development, the sector has a critical role to play in balancing economic growth with environmental responsibility.

On the occasion of World Environment Day, industry leaders reaffirmed their commitment to supporting India’s climate goals while delivering the materials required for resilient, durable and sustainable infrastructure.

Concrete

Building a Greener Future Together

Published

3 days ago

June 4, 2026

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Environmental sustainability requires immediate action, not just long-term commitments and discussions. Recycling, circular economy practices, and technology-driven waste management can help industries reduce environmental impact while supporting sustainable growth.

Author: Jignesh Kundaria, Director and CEO, Fornnax Technology

World Environment Day serves as an important reminder that environmental sustainability can no longer remain confined to discussions, reports, or long-term commitments. The environmental challenges facing the world today demand immediate, measurable, and collective action. Across industries and communities, waste generation continues to outpace our ability to process it responsibly, placing increasing pressure on ecosystems, natural resources, public health, and the well-being of future generations.

One of the most significant shifts required today is a change in how society perceives waste. Rather than being viewed as a material to be discarded, waste must be recognised as a valuable resource that can contribute to both economic growth and environmental protection when managed through the right technologies and systems. This mindset forms the foundation of the circular economy model that countries across the world are increasingly adopting to reduce landfill dependence, recover valuable materials, and create more sustainable industrial ecosystems.

India has made meaningful progress in strengthening awareness around sustainability, recycling, and environmental responsibility over the past decade. Significant efforts are being made to formalise the recycling sector through improved infrastructure, technology adoption, policy implementation, and broader stakeholder participation. These developments are creating a stronger foundation for responsible waste management and resource recovery across the country.

However, achieving long-term environmental impact requires collaboration from all stakeholders. Industries, policymakers, technology providers, and communities must work together with greater accountability to strengthen recycling ecosystems, encourage responsible waste management practices, and create sustainable outcomes through consistent execution rather than temporary interventions.

As someone closely associated with the recycling industry, I firmly believe that technology will play a decisive role in addressing future environmental challenges. Advanced recycling systems have the potential to recover valuable resources, reduce pollution, minimise landfill burdens, and conserve energy, creating a more sustainable future for generations to come. This belief is deeply reflected in Fornnax’s motto, “Committed to Create a Green Future,” which embodies our commitment to building long-term environmental value through innovation and responsible action.

At the same time, technology alone cannot deliver meaningful change. Real progress requires intent, awareness, participation, and a shared sense of responsibility. Sustainable development can only be achieved when innovation is supported by collective action and a genuine commitment to environmental stewardship.

On this World Environment Day, let us move beyond conversations and take meaningful steps towards creating a cleaner, greener, and more sustainable planet. By embracing innovation, strengthening recycling ecosystems, and acting responsibly today, we can create lasting environmental impact and secure a better future for generations to come.

Concrete

Dalmia Bharat Acquires Jaiprakash Associates Cement Assets for ₹2,850 Crore

Published

2 weeks ago

May 25, 2026

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Dalmia Cement executed a Business Transfer Agreement with Jaiprakash Associates and Adani Infra, to acquire 5.2 MnTPA of cement capacity across Madhya Pradesh and Uttar Pradesh.

Dalmia Cement (Bharat) announced on May 22, 2026 that it had signed a Business Transfer Agreement with Jaiprakash Associates Limited and Adani Infra (India) Limited for the acquisition of cement plants located at Rewa in Madhya Pradesh and Churk, Chunar and Sadwa in Uttar Pradesh. The deal was struck at an enterprise value of ₹2,850 crore and is expected to close within two weeks of execution.

The acquired assets from Jaiprakash Associates include 5.2 MnTPA of cement capacity and 3.3 MnTPA of clinker capacity. The package also covers 99 MW of thermal power capacity and railway sidings at Rewa, Chunar, and a common siding at Churk. This infrastructure gives the acquisition immediate operational utility beyond just production tonnage.

The transaction has a long backstory. Dalmia Cement had originally entered into a framework agreement with Jaiprakash Associates in December 2022, covering the sale of these business assets along with a long-term clinker supply arrangement. However, before the deal could be completed, Jaiprakash Associates was admitted to insolvency proceedings under the Insolvency and Bankruptcy Code. The earlier agreements could not be consummated as a result.

In an official statement, Puneet Dalmia, Managing Director & CEO, Dalmia Bharat, said, “I am very excited about addition of these assets in our portfolio. This serves as a great strategic fit for Dalmia. It helps us move forward in our journey to be a pan India player and provide a strong head start to serve the high potential markets in Central region. I am optimistic that the expansion potential of these assets along with close proximity with Dalmia’s captive mines will help us create a capacity hub for the future”.

Following the approval of Adani Group’s resolution plan for Jaiprakash Associates under the IBC framework, Dalmia approached the new management to revive discussions. The fresh Business Transfer Agreement was executed to settle all pending disputes, legal proceedings, and arbitration matters arising from the original framework agreement with Jaiprakash Associates.

Expanding market reach

Dalmia added, “Our familiarity with these assets under the earlier tolling arrangement gives us a deep understanding of the facilities and helps us establish strong connect with channel partners and vendors. We believe that this will help us in faster ramp up of capacities and quicker inroads into the market. As we look forward, I am very confident that we will be able to leverage the strengths of Dalmia to operate these assets in a manner where we can maximise value creation for all our stakeholders.”

With the addition of these plants, Dalmia Bharat’s total installed cement capacity will rise to 54.7 MnTPA upon consummation. The company has further expansion projects underway at Belgaum, Pune, and Kadapa, which are expected to take overall capacity to 66.7 MnTPA by Q2 to Q3 FY28.

The Central India location of the Jaiprakash Associates plants gives Dalmia Bharat faster access to markets in Madhya Pradesh and Uttar Pradesh than a greenfield build would have allowed. The company also cited debottlenecking and brownfield expansion as near-term opportunities at the acquired sites. Dalmia Bharat said the assets were expected to contribute positively to EBITDA and overall returns, given the pricing environment in the region and the company’s cost structure.