Macro Economy

Core sector grows 6.7% in June as refinery, coal, cement output rises

Our Bureau New Delhi | Updated on July 31, 2018

India’s infrastructure sector growth gathered pace in June posting an increase of 6.7 per cent year-on-year riding on increased production of refinery products, coal and cement.

Other core infrastructure sectors with higher production include steel, electricity and fertilisers. The two sectors, where production fell are crude oil and natural gas.

In May, growth in the eight core infrastructure industries had slowed down to a 10-month low of 3.6 per cent, while in the previous month growth of the core sectors was 4.6 per cent.

“Low base effect has worked this month as June was the period just before GST set in (last fiscal). These growth rates have to sustained in the coming months when the base effect will turn adverse as companies started the process of restocking following GST,” according to Madan Sabnavis, chief economist, Care Ratings.



The eight core industries comprise 40.27 per cent of the weight of items included in the Index of Industrial Production (IIP) and the higher number this month may reflect positively on the IIP figures as well. IIP growth could be above 5 per cent in June 2018, Sabnavis said.

In the April-June 2018-19 period, core sector production increased by 5.2 per cent over the corresponding period of previous year.

Petroleum refinery production (weight of 28.04 per cent) increased by 12 per cent in June, 2018 over June, 2017. Cumulatively, production increased by 6.6 per cent in the April-June, 2018-19 period over the corresponding period of previous year.

Coal production (weight of 10.33 per cent) increased by 11.5 per cent in June, while in the first quarter of the fiscal, its production increased by 13.2 per cent compared to the April-June period of the previous fiscal.

Cement production (weight of 5.37 per cent) increased by 13.2 per cent in June. Its cumulative index increased by 14.2 per cent during April-June, 2018-19 over the corresponding period of previous year.

Electricity generation and steel production, both accounting for a total weight of over 37 per cent, grew 4 per cent and 4.4 per cent respectively in June. In the first quarter of the fiscal, electricity generation and steel production increased 3.4 per cent and 2.9 per cent respectively.

Published on July 31, 2018

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