NEW DELHI: India’s eight core sector industries’ output rose by 8.9% in June on account of a lower base, however, the growth was lower than 16.3% recorded in May. In June 2020, the core sector output contracted 12.4% due to the restrictions imposed across the country to control the spread of Covid-19.
On a sequential basis, the core sector output, captured by the index of eight core industries (ICI), grew 1.1%, even as several states across the country kickstarted the unlock process.
“While the core index rose in MoM terms in June 2021, it remained below the April 2021 level, particularly on account of cement, electricity and petroleum products, consistent with the picture of an incomplete recovery revealed by various other high-frequency indicators.
Moreover, the core sector index in June 2021 was a moderate 4.7% lower than the pre-Covid level of June 2019, on account of all the components except fertilisers and natural gas,” Aditi Nayar, Chief Economist at ICRA, said.
According to the data released by the commerce ministry, the growth rate of index of eight core industries during April-June 2021-22 stood at 25.3% as compared to the corresponding period of last FY.
“For Q1 FY2022 as a whole, the core sector recorded a base-effect led YoY expansion of 25%, while remaining 4.5% lower than the pre-Covid level of Q1 FY2020, reflecting the impact of the second wave of Covid-19 on economic activity,” Nayar said.
For the month, barring crude oil, all sectors registered growth. Coal production increased 7.4% YoY in June, while crude oil production saw a 1.8% decline. Natural gas and petroleum refinery products increased 20.6% and 2.4%, respectively. Fertilisers production in June increased 2%, while steel production increased significantly by 25% YoY.
June output grows slower than in May
The growth was lower than 16.3% recorded in May. In June 2020, the core sector output contracted 12.4% due to the restrictions imposed across the country to curb Covid infections.