Core sector expands 11.6% in August on low base
Barring crude oil and fertilizers, all other sectors reported growth in output
NEW DELHI: Eight core infrastructure industries recorded an 11.6% increase in output in August, benefiting from a low base of the year-earlier period and continuing the sustained growth that began in March.
Output of coal, crude oil, natural gas, refinery products, fertilizers, steel, cement and electricity industries comprise twofifths of the weight of items included in the Index of Industrial Production (IIP).
Data released by the ministry of commerce and industry showed that barring crude oil and fertilizers, all other sectors reported growth in output. In the April-august period of FY22, the core sector witnessed a 19.3% expansion from the year-ago period. A lull in monsoon rains in August boosted coal, cement, and electricity, and lifted mobility that propped up growth in petroleum refinery products, experts said. In July, core sector growth was slightly lower at 9.9%.
“Core output displayed a heartening 3.9% rise in August 2021 relative to the pre-covid period of August 2019, led by all the sub-sectors except refinery products and crude oil,” said Aditi Nayar, chief economist at rating agency Icra Ltd.
Meanwhile, the data for core sector growth for May has been revised to 16.4% from the provisional level of 16.8%.
While the output of coal and natural gas jumped 20.6% each in August from the year-ago period, refinery products saw a 9.1% jump. Steel, cement, and electricity output improved by 5.1%, 36.3% and 15.3%, respectively, in August, data showed. Meanwhile, crude oil production dropped by 2.3% and fertilizer output by 3.1%.
The economic recovery also reflected in government finances for the April-august period. The Union government’s fiscal deficit stood at ₹4.68 lakh crore at the end of August, touching 31.1% of the budgeted level, official data from the Controller General of Accounts (CGA) showed. As per budget estimates made in February, the Centre’s gap between receipts and spending to be met with borrowings is more than ₹15 lakh crore. In the first five months of the last fiscal year, the Centre’s fiscal deficit had breached the full-year target as revenue receipts declined as a result of the stringent national lockdown aimed at combating the pandemic and spending requirements to deal with the situation shot up.