Core sector contraction further slows in June, only fertiliser sector shows growth

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NEW DELHI: Aided by the relaxation in lockdown restrictions, India’s infrastructure sector contracted at a slower pace in June compared to May, data released on Friday showed. However, barring fertilisers, other seven industries registered a decline in output, prompting independent economists to expect industrial production to again contract in June.

The index of eight core industries dropped 15% in June compared to a 22% decline in May. It had declined 37% in April. This is the fourth consecutive month of contraction in the core sector.

“Its cumulative growth during April to June, 2020-21 was -24.6%,” commerce and industry ministry said in a release.

The eight industries in the index are coal, crude oil, natural gas, refinery products, fertiliser, steel, cement and electricity. These together have a 40% weight in the Index of Industrial Production (IIP).

“There is a slightly positive factor in the otherwise third negative growth rate in the core sector growth for June in current financial year,” said Madan Sabnavis, Chief Economist, CARE Ratings.

Fertiliser production grew 4.2% in June, slower than 7.5% in May.

Cement and steel sectors reported lower contraction of 6.9% and 33.8%, respectively, in June, as against 21.4% and 43.1% in May.

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Tagged cement, core sectors, Crude oil, Fertiliser, iip, Indian economy, steel

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