India’s core sector growth rose to 6.1 percent in July after it had eased to a five month low of 5.1 percent in the previous month as four of the eight sectors grew faster, according to data released by the government on August 30.
"The sub-sectoral data indicates that the upturn in yoy growth was not uniform/broad-based. The significant pickup in the yoy growth of only four sectors namely refinery products, fertilisers, steel and cement representing 54% of the eight-sector infrastructure index helped in lifting up the growth of the segment," said Paras Jasrai, senior analyst, India Ratings and Research.
The first four months of FY25 recorded 6.1 percent growth compared with 6.6 percent during similar period in the previous year.
The combined Index of Eight Core Sector Industries measures the output of key sectors - cement, coal, crude oil, electricity, fertilisers, natural gas, refinery products and steel - which have a 40% weight in the Index of Industrial Production (IIP). The IIP index is likely to increase by 5 percent in July, helped by higher core.
Industrial production had slumped to a five-month low of 4.2 percent in June compared with 6.2 percent in the previous month.
While growth in coal and electricity slowed down in July, petroleum, fertiliser, steel and cement grew faster during the month compared.
Steel grew to a three month high of 7.2 percent in July compared with 6.7 percent in the previous month. Cement rose to a four month high of 5.5 percent from 1.9 percent in the previous month, indicating a pick up in construction and infrastructure spending by states.
Petroleum rose to an eight month high of 6.6 percent, while fertiliser was at a seven month high.
Crude oil continued to contract in April, while natural gas slipped into contraction after a hiatus of 14 months.
Pickup in rainfall activity kept coal and electricity performance subdued. Coal production was at lowest level in 21 months, while electricity production fell to a six month low in July.
This coupled with higher base from the previous year is expected to keep growth contained around 3 percent, Jasrai noted.
India's rainfall surplus widened to 7 percent as of August 30.
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