Demonetization Impact
Badly battered by the demonetization drive of the government, the growth of the country's core sector dwindled down to 5.9% in November as compared to 6.6% in October last year. According to sources, infrastructure output growth slowed as cash crunch after the government's banknote ban, which crimped demand and prompted companies to curb production. Growth in the index of eight core infrastructure sectors however was still higher than the 0.5% growth in November 2015. In the prevailing scenario, the November infrastructure data is in line with other similar indicators. The government stat showed that growth in output of refinery products slumped to 2% from 15.1% in October. The pace of expansion in steel production fell to 5.6% from 16.9% and cement slumped to 0.5% from 6.5% and also crude oil and natural gas output contracted 5.4% and 1.7%, respectively. Three of the eight sectors showed improvement as electricity generation grew the fastest at 10.2%, up from 2.8% in October. Fertilizer output growth accelerated to 2.4% in November from 0.8% in October while coal production rose 6.4% after three months of decline. These eight sectors have a cumulative 38% weight in the Index of Industrial Production, said official sources.