ET View: Growth slowdown a core problem

The International Monetary Fund has revised down its growth forecasts for global output and trade. Guess what? India is part of this world: only a tiny chunk of it has escaped moonwards.

Growth is visibly slowing down in India. Core sector growth in June has collapsed to 0.2%, with the hydrocarbon segments — crude oil, natural gas and refining, which together account for about 44% of the sector — registering declines. Fertiliser has registered a 1.5% gain in June, but over April-June, the industry has declined by 1.1%.

Whereas coal production went up in June by only 3.2%, electricity generation has gone up by a respectable 7.3%. The other sector that has prevented collapse of core sector growth into negative territory is steel, which grew 6.9% in June and 13.7% in April-June.

Cement, which should be a big beneficiary of the government’s big push on roadmaking, grew a mere 1.2% over April-June and actually declined by 1.5% in June. It is time the government started to release its funds into the economy and activated its public-private-partnership plans for infrastructure.


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