Double-digit growth in merchandise exports and sharp improvement in infrastructure sector augur well for industrial production
New Delhi : Led by healthy growth in cement, electricity and coal production, the eight core industries grew to a nine-month high of 7.3 per cent in June, indicating signs of economic revival.
The output of eight core industries–coal, crude oil, natural gas, refinery products, steel, cement, fertilisers and electricity–had grown 1.2% in June last year and 2.3% in the previous month.
The infrastructure sector has a combined weight of about 38 per cent in the Index of Industrial Production (IIP).
Cement production saw a 21-month high growth of 13.6%, while electricity jumped at a record high of 15.7%. Coal output posted a nine-month high growth of 8.1% in June, while steel saw a growth of 4.2%.
Rating agency ICRA said: “The double-digit growth in merchandise exports and with the sharp improvement in core sector growth suggest that growth of industrial production in June could be as high as 5-6 per cent”.
India’s exports grew by 10.22 per cent to USD 26.4 billion in June. Index of Industrial Production (IIP) for June will be released on August 12. The core sector had recorded a growth of 8 per cent in September 2013. In May 2014, the growth was 2.3 per cent.
Natural gas contracted for the 43rd consecutive month by 1.7%, while fertilizer output fell to three-month low of (-) 1.0%.
Refinery products output growth slowed down by 1.2 per cent as against 1.8 per cent in June last year.
Similarly steel production too declined by 4.2 per cent in June from 7.6 per cent in the same month last year. During April-June, growth in the eight core industries grew by 4.6 per cent from 3.7 per cent in the year-ago period.