NEW DELHI: The production output of eight core industries contracted second time in a row by 0.4 per cent in April due to poor performance from sectors like electricity, cement, refinery products and fertiliser. This also makes a case for the Reserve Bank of India to cut interest rates when it announces the monetary policy on June 2.
The output had declined by 0.1 per cent in March 2015, while it had seen a growth of 5.7 per cent a year ago in April 2014.
The infrastructure sector, which comprises coal, crude oil, oil refining, natural gas, steel, cement, electricity and fertilisers, accounts for nearly 38 per cent of India's industrial output.
Coal and steel were only two sectors that saw some growth, while crude oil and natural gas also recorded lower output in April. Coal production increased by 7.9 per cent in April, 2015 over April, 2014. Its cumulative index during April to March, 2014-15 increased by 8.4 per cent over corresponding period of previous year.
In April 2015, the output of crude oil declined by 2.7 per cent, natural gas by 3.6 per cent, electricity by 1.1 per cent and cement by 2.4 per cent. The production of refinery products too declined by 2.9 per cent and fertiliser output shrunk by 0.04 per cent.
The overall growth of eight core industries in the entire 2014-15 fiscal stood at 3.5 per cent against 4.2 per cent in the previous fiscal.
The growth rate of core sector industries has been declining since November last year. It was 6.7 per cent in November 2014, which fell to 2.4 per cent in December 2014 and then to 1.8 per cent in January and 1.4 per cent in February.