India's core sector growth inches up to 1.7% in June
What's the story
India's core sector output, which comprises eight key industries, grew by 1.7% in June. The data was released by the Ministry of Commerce and Industry on Monday. This is a slight improvement over May's revised growth rate of 1.2%. However, it is significantly lower than the impressive 5% growth recorded in June last year.
Sectoral analysis
5 out of 8 sectors witnessed a decline
The core sector output is a composite of coal, crude oil, natural gas, refinery products, fertilizers, steel, cement, and electricity. In June, five out of these eight sectors, coal (6.8%), crude oil (1.2%), natural gas (2.8%), fertilizers (1.2%), and electricity generation (2.8%), witnessed a decline in their respective outputs year-on-year (YoY). This dip highlights the challenges faced by these key industries during this period.
Sectoral growth
3 sectors registered positive growth
Despite the overall slowdown, three sectors, refinery products (3.4%), steel (9.3%), and cement (9.2%), registered positive growth in June. This indicates that while some industries are struggling, others are managing to maintain their momentum and contribute positively to the core sector output. The data for April-June this fiscal year shows an expansion of 1.3% against a much higher 6.2% during the same period last fiscal year.
Information
Core sector output contributes 40.27% to IIP
The core sector output contributes 40.27% to the Index of Industrial Production (IIP). This highlights its significance in determining India's industrial performance. The IIP is a key indicator of economic growth and is used by policymakers to gauge health of different sectors within the economy.