New Delhi: India’s core sectors swelled by 5.2 per cent in June due to double-digit growth in coal and cement sectors. It had expanded by 2.8 per cent in May, slowest in 2016.
The core consists of eight infrastructure sectors -- coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity and comprise nearly 38 per cent of the total industrial production. It had expanded by 3.1 per cent in June 2015.
“The core industrial sector has grown at a healthy rate in June on the back of good growth numbers in coal, cement and electricity production. Encouragingly, steel has registered positive growth for the last four months, which in conjunction with healthy cement production numbers show that public capex in the infrastructure space might be having an effect,” said Rishi Shah, economist, Deloitte India.
He said that coal continues to do well on the back of clarity in policy framework and a push by the government to eliminate imports. “Lastly, while electricity growth has been healthy, we could see this trend continue as good rainfall could help hydroelectricity generation. Going ahead, expect the core sectors to continue performing reasonably well,” said Mr Shah.
Further, these numbers are likely to help the overall growth in industry that has been bogged down by lack of momentum in investments," he added. “While the pickup in overall core sector growth is heartening, the disaggregated performance was fairly mixed across the constituents with double digit growth in coal and cement interspersed with continued contraction in crude oil and natural gas," said rating agency ICRA, senior economist Aditi Nayar. As per the data, coal production increased by 12 per cent, cement production grew by 10.3 per cent. Fertiliser production increased 9.8 per cent in June.
