For the eighth consecutive month, the core infrastructure sector contracted mainly because of a slump in the production of crude oil, natural gas, refinery products and steel.

The output of eight core infrastructure sectors, which accounts for 40.27% in the index of industrial production (IIP), contracted 2.5% in October.

In the year-ago period, production in the eight core sectors had contracted 5.5%, according to the data released by the commerce and industry ministry.

During April to October 2020-21, the core sector contracted by 13% compared to a growth of 0.3% a year ago.

"The combined index of eight core industries stood at 124.2 in October 2020, which declined by 2.5% (provisional) compared with the index of October 2019," the ministry said.

The output of crude oil, natural gas, refinery products and steel declined by 6.2%, 8.6%, 17% and 2.7%, respectively. The growth rate in fertilizer production declined to 6.3% in October, from 11.8% a year ago.

However, the coal, cement and electricity sector output grew 11.6%, 2.8% and 10.5%, respectively in October, 2020.

"In our view, the non-core portion of the IIP may perform better than the core sectors in October 2020, led by the building up of stocks ahead of the festive season. Based on this, we expect the IIP to record a growth of 4-7% in October 2020," said Icra principal economist Aditi Nayar.

"Subsequently, growth in many sectors may moderate in November 2020, on the back of some satiation of the pent-up demand, as well as the temporary impact of a larger number of holidays," she added.