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Core sector output rose to 32-months high in March 2021

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The eight core sector output rose to 32-months high of 6.8 per cent in March 2021 chiefly on account of a negative base of -8.5 per cent in the corresponding month of the previous year. Therefore, one needs to read the core sector growth number with caution. The pick-up observed in March 2021 has been on account of significant double-digit growths witnessed in steel, cement, electricity and natural gas, where the production activity had seen a sharp decline in March 2020 on the back of the imposition of the nation-wide lockdown. The contraction witnessed in the month of February 2021 has been revised upwards to -3.8 per cent as against the previous estimate of 4.6 per cent.

For the full fiscal FY21, the core sector has contracted by 7 per cent compared with a subdued pace of 0.4 per cent in FY20. This is the first time in the last eight years when core sector output has declined. In 8 of out the 12 months during the fiscal, core sector output has seen a contraction, reflective of the adverse impact of the pandemic and the consequent lockdowns on the production activities of the 8-core sector. During the year, there has been a broad-based decline across almost all the sectors with the impact being sharp in refinery products, steel and cement sector. Fertiliser has been the only sector which has seen positive growth, which reflects unabated performance of the agriculture sector despite the lockdown while the impact on electricity production has been relatively lower as resumption of economic activities in the second half of the fiscal pushing up the growth number.

Key highlights:

  • Coal production recorded its sharpest contraction in the new series with the base year 2011-12. The de-growth of 21.7 per cent in March 2021 has come against a positive base of 3.7 per cent in March 2020 and it also reflects high level of coal inventories with coal producers. However, there has been a sequential improvement owing to healthy demand from the power steel and cement sector.

  • Crude oil production fell by 3.1 per cent in March 2021 compared with a decline of 5.5 per cent in March 2020 and this is the 40th consecutive month of negative growth for the sector. This decline can be ascribed to delays in installation of new platforms due to COVID-19 restrictions, localised lockdowns and lower planned contribution from work-over, drilling and old wells. Natural gas production rose sharply by 12.3 per cent in March 2021, its highest growth in the new series with the base year 2011-12. This is the first time the segment has recorded positive growth after 21 consecutive months of deceleration. The positive growth has been on account of a low base (-15 per cent in March 2020) coupled with production commencement of natural gas from one of the key players in the private sector.

  • Refinery production declined by 0.7 per cent in March 2021 compared with 0.5 per cent in March 2020, recording the 13th consecutive month of decline in production. Although there has been a sequential improvement, the fall can be ascribed to lower demand for petroleum products and annual maintenance and installation shutdown for some plants.

  • Fertiliser production continued to decline for the second consecutive month. The fall in production has been sharper in March 2021 by 5 per cent compared with 3.7 per cent in February 2021 but is better than 11.8 per cent decline in March 2020. The YoY decline is the sharpest in the last one year.

  • Steel (23 per cent), cement (32.5 per cent) and electricity (21.6 per cent) have registered positive growth of above 20 per cent during March 2021 and is primarily on account of a statistical base effect. However, year-end phenomenon of infrastructure projects being on track coupled with State governments and Central government expediting capex plans have provided the impetus and the same is reflected in the numbers. Sequentially too all three sectors have registered a notable pickup. In case of steel, producers ramped up production backed by higher export demand and realisations.

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The March, April and May 2021 growth numbers for core sector and industrial growth was expected to be high on the back of sharp declines registered last year. The core sector growth numbers for the next two months are likely to be elevated as the decline in April and May 2020 were sharper than March 2020. Hence, we must be cautious in reading the growth numbers for the next two months also as the theme of March 2021 is likely to carry forward. IIP growth for March 2021 is likely to be closer to double-digit mark given the decline of 16.7 per cent last year.

Courtesy: CARE Ratings

ABOUT THE AUTHOR:

The article is authored by Sushant Hedem who is Associate Economist with CARE Ratings. He can be contacted at: sushant.hede@careratings.com | +91-22-6837 4348.

Disclaimer: This report is prepared by CARE Ratings Limited. CARE Ratings has taken utmost care to ensure accuracy and objectivity while developing this report based on information available in public domain. However, neither the accuracy nor completeness of information contained in this report is guaranteed. CARE Ratings is not responsible for any errors or omissions in analysis / inferences / views or for results obtained from the use of information contained in this report and especially states that CARE Ratings has no financial liability whatsoever to the user of this report.

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Cement Makers Reaffirm Commitment to Sustainable Growth

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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.

 

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Building a Greener Future Together

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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.

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Concrete

JK Lakshmi Advances LC3 Cement Expansion

Company highlights commercial production and research partnerships

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The meeting reviewed progress in limestone calcined clay cement (LC3) technology and its commercial adoption in India’s cement sector, focusing on low-carbon alternatives to conventional binders. JK Lakshmi Cement noted that limestone calcined clay cement can reduce carbon dioxide emissions by up to 40 per cent compared with conventional cement and said this reduction supports industry decarbonisation. The company highlighted that it was among the first two cement manufacturers in India to move LC3 into commercial production after the Bureau of Indian Standards approved the technology as a cement standard.

Vinita Singhania said the transition of LC3 from research to commercial production reflected collaboration between industry, academia and international institutions. Maya Tissafi acknowledged JK Lakshmi Cement’s role in advancing LC3 adoption in India and its contribution in taking the technology from laboratory trials to commercial implementation. Both representatives underlined the growing relevance of sustainable construction materials as India expands infrastructure and urban development.

The meeting explored continued collaboration with Swiss research institutions such as EPFL, EMPA and ETH Zurich alongside Indian academic partners and development organisations. JK Lakshmi Cement has been associated with the LC3 initiative since 2014 and worked with EPFL, IIT Delhi, IIT Madras, Development Alternatives and Technology and Action for Rural Advancement. The company conducted one of the earliest industrial trials of LC3 and recently announced commercial production of Green Pro LC3 cement from its Jaykaypuram plant in Rajasthan.

India remains the world’s second-largest cement producer and expansion of infrastructure, urbanisation and housing demand continue to support long-term sector growth, increasing interest in low-carbon technologies. The company reported an annual turnover of more than Rupees (Rs) 60 bn and current cement capacity of about 18 million (mn) tonnes (t) per annum, with a target of reaching 30 million (mn) tonnes (t) by 2030. Apart from grey cement, the company also makes ready-mix concrete, gypsum plaster, wall putty, primers, adhesives and fly ash blocks, and both sides concluded on the need for continued collaboration to develop sustainable construction solutions.

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