New Delhi: The output of eight core sectors grew 8.9 per cent in June, mainly due to a low base effect and uptick in production of natural gas, steel, coal and electricity, official data showed on Friday.
The eight infrastructure sectors of coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity had contracted by 12.4 per cent in June 2020 due to the lockdown restrictions imposed to control the spread of coronavirus infections.
In May this year, these key sectors had recorded a growth of 16.3 per cent, while it was 60.9 per cent in April.
According to the commerce and industry ministry data, production of coal, natural gas, refinery products, steel, cement and electricity jumped by 7.4 per cent, 20.6 per cent, 2.4 per cent, 25 per cent, 4.3 per cent and 7.2 per cent, respectively, in June 2021.
The same stood at (-) 15.5 per cent, (-) 12 per cent, (-) 8.9 per cent, (-) 23.2 per cent, (-) 6.8 per cent and (-) 10 per cent in the corresponding month last year.
Crude oil output contracted by 1.8 per cent during the month under review as against a negative growth of 6 per cent in June 2020. Fertiliser segment recorded a growth of 2 per cent in June.
During April-June period this fiscal, the eight sectors grew by 25.3 per cent against a contraction of 23.8 per cent in the same period last year.
Commenting on the data, ratings agency ICRA’s Chief Economist Aditi Nayar said continued unlocking by the states, improved mobility and higher electricity demand, pushed up in part by the lull in rainfall, are expected to boost the core sector growth to 11-14 per cent in July 2021.
Despite the gradual unlocking, the sequential uptick in the overall core index in June 2021 was mild at just 1.1 per cent , with double-digit increases in cement and fertilisers, dampened by a month-on-month decline in petroleum refinery products and coal, with the latter reflecting the onset of the monsoon, she said. Also Read: You can now control your Honda City with ‘Ok Google’ voice commands
“We expect the IIP (index of industrial production) to expand by 12-17 per cent in June 2021, exceeding the core sector growth, as some of the other high frequency indicators such as GST e-way bills and auto output have displayed a solid sequential uptick in that month, engendered by the relaxation of state level restrictions,” she added. Also Read: Amazon hit with $886 million EU data privacy fine