Core sector growth hits 5-month high of 8.2% in June

The sharp improvement in performance last month was down to improved output growth in six of the eight sectors, with only fertiliser and cement output growing at a slower pace in June compared to May on a year-on-year basis. However, cement production still grew at an impressive 9.4 percent, while fertiliser output was up 3.4 percent, down from 9.7 percent growth in May.

Of the other six sectors which saw improved performance in June, crude oil output contracted again - this time by 0.6 percent, compared to a fall of 1.9 percent in May.

"The tardy onset of the monsoon contributed to an improved performance of electricity, coal etc," noted Aditi Nayar, chief economist at ICRA.

Electricity production was up 3.3 percent in June compared to a growth of 0.8 percent in May, while coal output increased by 9.8 percent. The sector to post the highest growth was steel, whose output jumped by 21.9 percent - double the May growth rate of 10.9 percent.

With the eight core industries making up more than 40 percent of the weight of the Index of Industrial Production, Nayar expects industrial growth in June to be in the range of 4-6 percent "in spite of the moderation in the year-on-year performance of several available high-frequency indicators".

India's industrial output had grown by 5.2 percent in May, as per data released on July 12. Data for June will be released on August 11.