The output of India’s eight key infrastructure industries expanded 4 per cent year-on-year in June—the slowest in 20 months, data released by the Department for Promotion of Industry and Internal Trade (DPIIT) on Wednesday showed.
The moderation in growth can be attributed to factors such as a high base and monsoons moderating electricity demand. The growth in the output was 6.4 per cent in May 2024 and 8.4 per cent in June 2023.
The eight sectors—coal, steel, cement, fertilisers, electricity, natural gas, refinery products, and crude oil—comprise two-fifths of India’s total industrial production. As a result, they have a significant impact on the index.
Aditi Nayar, chief economist at ICRA, said that the core sector expansion slid to a 20-month low of 4 per cent in June 2024, led by a moderation in growth or deepening contraction in five of the eight constituents, barring coal, fertilisers, and cement, compared to May.
“With the onset of the monsoon, electricity growth reverted back to single digits after two months, while remaining healthy at 7.7 per cent. With the dip in the core sector growth, we expect the IIP to post a rise of 3.5-5 per cent in June 2024,” Nayar said.
Barring crude oil and refinery products, the remaining six sectors witnessed positive growth .
Coal production grew 14.8 per cent in June, amid higher demand for power. Electricity generation witnessed 7.7 per cent growth, lower than 13.7 per cent growth in May but higher than the 4.2 per cent growth during June 2023.
Production of fertiliser, natural gas, steel, and cement witnessed 2.4 per cent, 3.3 per cent, 2.7 per cent, and 1.9 per cent growth, respectively, in June, as compared to the same period a year ago.