Core sector contraction further slows in June, only fertiliser sector shows growth

NEW DELHI: Aided by the relaxation in lockdown restrictions, India’s infrastructure sector contracted at a slower pace in June compared to May, data released on Friday showed. However, barring fertilisers, other seven industries registered a decline in output, prompting independent economists to expect industrial production to again contract in June.

The index of eight core industries dropped 15 per cent in June compared to a 22 per cent decline in May. It had declined 37 per cent in April. This is the fourth consecutive month of contraction in the core sector.

“Its cumulative growth during April to June, 2020-21 was -24.6 per cent,” commerce and industry ministry said in a release.


The eight industries in the index are coal, crude oil, natural gas, refinery products, fertiliser, steel, cement and electricity. These together have a 40 per cent weight in the Index of Industrial Production (IIP).

“There is a slightly positive factor in the otherwise third negative growth rate in the core sector growth for June in current financial year,” said Madan Sabnavis, Chief Economist, CARE Ratings.

Fertiliser production grew 4.2 per cent in June, slower than 7.5 per cent in May.

Cement and steel sectors reported lower contraction of 6.9 per cent and 33.8 per cent, respectively, in June, as against 21.4 per cent and 43.1 per cent in May.


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