Economy & Market
Output soars on statistical base effect
The core sector data should not be taken at face value as they come over unusual circumstances in 2020. A better way would be to compare over March even though there are seasonal influences.
In April 2021, the eight core sectors registered a double-digit output growth of 56.1 per cent compared with 11.4 per cent growth in March 2021. The high growth in output can be attributed to a low base effect (-37.9 per cent in April 2020) as the nation-wide lockdown imposed last year brought production activities to a standstill resulting in huge output losses. The expansion in April has been led by an exponential growth in output of steel and cement. All sectors except crude oil have witnessed positive growth during the month.
However, the core sector output has been lower by 15.1 per cent in April 2021 over the March 2021 level with a broad-based contraction across all segments on a month-on-month basis. For March 2021, the core sector growth has been revised upwards from 6.8 (prov.) to 11.4 per cent (first revision) on account of improved coal production.
Key highlights
Coal production rose to a six-month high of 9.5 per cent in April 2021, higher than 0.3 per cent in March 2021 and -15.5 per cent in April 2020. However, coal production was lower sequentially in April 2021 compared with March 2021. The second wave of Covid-19 pandemic impacted production of coal as large number of employees tested positive for virus in state-run CIL.
Crude oil production witnessed a de-growth of 2.1 per cent in April 2021 compared with -6.4 per cent growth in the corresponding month last year. This fall can be ascribed to the less than planned contribution from workover wells, drilling wells and old wells by government owned oil companies. Production by private/joint venture companies was marginally lower on YoY basis, due to few wells being under maintenance, and some not producing due to possible casing damage, snapped/unscrewed sucker rod string and unavailability of effective demulsifier.
Natural gas production rose by 25 per cent in April 2021 as against a contraction of 19.9 per cent in April 2020 as output from fields operated by the private sector and joint ventures tripled and bulk of this came from eastern offshore fields. However, production by ONGC was flattish during the month.
Refinery production was in the positive territory for the first time in 13 successive months. Output in this segment grew by 30.9 per cent in April 2021 as against negative growth of 24.2 per cent in April 2020. Of these, major products that witnessed a rise in production during the month were LPG, Naptha, petrol, petcoke, bitumen, while products that saw a fall in production were superior kerosene oil and furnace oil.
Fertilisers production in April 2021 grew by 1.7 per cent over -4.5 per cent in the corresponding month last year. This lower output growth is reflective of the limited impact of coronavirus led disruptions on this segment in April 2020. Fertilizers production in April was 5.4 per cent lower when compared to March as the demand for fertilizers did not pick up because Kharif sowing doesn?? start in April.
Steel output saw exponential growth of 400 per cent in April 2021 compared with negative growth of 82.8 per cent in April 2020. However, sequentially steel production fell by 20.6 per cent. The rising coronavirus cases across the country, labour exodus and the diversion of liquid oxygen to hospitals for coronavirus patients impacted steel production during April 2021.
Cement production on a year-on-year basis increased by 548.8 per cent in April 2021 over -85.2 per cent April 2020. Monthly cement production declined by 15.2 per cent in April 2021 compared to March 2021 as the uptick seen in infrastructure and construction activities since H2-FY21 witnessed a slowdown due to recent spike in Covid-19 cases and subsequent imposition of localised restrictions from April 2021. Even the rural demand that had aided growth in demand last year seems to be affected by the second wave of Covid-19.
Electricity production increased by 38.7 per cent in April 2021, higher than 22.5 per cent in the previous month and -22.9 per cent in the corresponding month last year primarily on account of a low base effect as demand for electricity from the commercial sector was dampened by the disruption in economic activities in April last year. The growth in output witnessed in this segment during the month is the highest in the new series with the base year 2011-12.
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As expected the core output for April 2021 has been elevated on the back of a statistical base effect. The trend is likely to continue in the months ahead owing to output disruptions of May 2020 and slow pick-up in production following resumption of economic activities in June and July last year. The index of industrial production for April 2021 is likely to be high given the double-digit contraction of 57.3 per cent witnessed in the corresponding month last year.
Courtesy: CARE Ratings
ABOUT THE AUTHOR:
Akanksha Bhende, Associate Economist with CARE Ratings.
Disclaimer: This report is prepared by CARE Ratings. 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.
Jignesh Kundaria, Director and CEO, Fornnax Technology
India is simultaneously grappling with two crises: a mounting waste emergency and an urgent need to decarbonise its most carbon-intensive industries. The cement sector, the second-largest in the world and the backbone of the nation’s infrastructure ambitions, sits at the centre of both. It consumes enormous quantities of fossil fuel, and it has the technical capacity to consume something else entirely: the waste our cities cannot get rid of.
According to CPCB and NITI Aayog projections, India generates approximately 62.4 million tonnes of municipal solid waste annually, with that figure expected to reach 165 million tonnes by 2030. Much of this waste is energy-rich and non-recyclable. At the same time, cement kilns operate at material temperatures of approximately 1,450 degrees Celsius, with gas temperatures reaching 2,000 degrees. This high-temperature environment is ideal for co-processing, ensuring the complete thermal destruction of organic compounds without generating toxic residues. The physics are in our favour. The infrastructure is not.
Pre-processing is not the support act for co-processing. It is the main event. Get the particle size wrong, get the moisture wrong, get the calorific value wrong and your kiln thermal stability will suffer the consequences.
The Regulatory Push Is Real
The Solid Waste Management (SWM) Rules 2026 mandate that cement plants progressively replace solid fossil fuels with Refuse-Derived Fuel (RDF), starting at a 5 per cent baseline and scaling to 15 per cent within six years. NITI Aayog’s 2026 Roadmap for Cement Sector Decarbonisation targets 20 to 25 per cent Thermal Substitution Rate (TSR) by 2030. Beyond compliance, every tonne of coal replaced by RDF generates measurable carbon reductions which is monetisable under India’s emerging Carbon Credit Trading Scheme (CCTS). TSR is no longer a sustainability metric. It is a financial lever.
Yet our own field assessments across multiple Indian cement plants reveal a sobering reality: the primary barrier to scaling AFR adoption is not waste availability. It is the fragmented and under-engineered pre-processing ecosystem that sits between the waste and the kiln.
Why Indian Waste Is a Different Engineering Problem
Indian municipal solid waste is not the material that imported shredding equipment was designed for. Our waste streams frequently exceed 40 per cent to 50 per cent moisture content, particularly during monsoon cycles, saturated with abrasive inerts including sand, glass, and stone. Plants relying on imported OEM equipment face months of downtime awaiting proprietary spare parts. Machines built for segregated, low-moisture waste fail quickly and disrupt the entire pre-processing operation in Indian conditions.
The two most common failures we observe are what I call the biting teeth problem and the chewing teeth problem. Plants relying solely on a primary shredder reduce bulk waste to large fractions, but the output remains too coarse for stable kiln combustion. Others attempt to use a secondary shredder as a standalone unit without a primary stage to pre-size the feed, leading to catastrophic mechanical failure. When both stages are present but mismatched in throughput capacity, the system becomes a bottleneck. Achieving the 40 to 70 tonnes per hour required for meaningful coal displacement demands a precisely coordinated two-stage process.
Engineering a Made-in-India Answer
At Fornnax, our response to these challenges is grounded in one principle: Indian waste demands Indian engineering. Our systems are built around feedstock homogeneity, the holy grail of kiln stability. Consistent particle size and predictable calorific value are the foundation of stable kiln combustion. Without them, no TSR target is achievable at scale.
Our SR-MAX2500 Dual Shaft Primary Shredder (Hydraulic Drive) processes raw, baled, or loosely mixed MSW, C&I waste, bulky waste, and plastics, reducing them to approximately 150 mm fractions at throughputs of up to 40 tonnes per hour. The R-MAX 3300 Single Shaft Secondary Shredder (Hydraulic Drive), introduced in 2025, takes that primary output and produces RDF fractions in the 30 to 80 mm range at up to 30 tonnes per hour, specifically optimised for consistent kiln feeding. We have also introduced electric drive configurations under the SR-100 HD series, with capacities between 5 and 40 tonnes per hour, already operational at a leading Indian waste-processing facility.
Looking ahead, Fornnax is expanding its portfolio with the upcoming SR-MAX3600 Hydraulic Drive primary shredder at up to 70 tonnes per hour and the R-MAX2100 Hydraulic drive secondary shredder at up to 20 tonnes per hour, designed specifically for the large-scale throughput that higher TSR ambitions require.
The Investment Case Is Now
The 2070 Net-Zero target is not a distant goal for India’s cement sector. It starts today, with decisions being made on the plant floor.
The SWM Rules 2026 are already in effect, requiring cement plants to replace coal with RDF. Carbon credit markets are opening up, and coal prices are not going to get cheaper. Every tonne of coal a cement plant replaces with waste-derived fuel saves money on one side and generates carbon credit revenue on the other. Pre-processing infrastructure is no longer just a compliance requirement. It is a business investment with a measurable return.
The good news is that nothing is missing. The technology works. The waste is available in every Indian city. The government has provided the policy direction. The only thing standing between where the industry is today and where it needs to be is the commitment to build the right infrastructure.
The cement companies that move now will not just meet the regulations. They will be ahead of every competitor that waits.
About The Author
Jignesh Kundaria is the Director and CEO of Fornnax Technology. Over an experience spanning more than two decades in the recycling industry, he has established himself as one of India’s foremost voices on waste-to-fuel technology and alternative fuel infrastructure.
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