India's core sector growth slowed to a 20-month low of 4 per cent in June from 6.4 per cent in May, as growth in five of the country's eight industries fell short of the previous month.
In addition, the growth rate for the first quarter of this year was 5.7 per cent, as opposed to 6 per cent in the same period last year.
Key sectors with a 40 per cent weight in the Index of Industrial Production (IIP) are cement, coal, crude oil, electricity, fertilizers, natural gas, steel, and refinery products. These sectors are measured by the combined index of eight core sector industries.
Crude oil & refinery products
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Two sectors of the industry saw a contraction, including crude oil and refinery products. The other five industries saw a slowdown in activity compared to the previous month, with the exception of coal, cement, and fertilisers.
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Growth in steel fell precipitously to 2.7 per cent from 6.8 per cent in the previous month, while growth in electricity almost halved to 7.7 per cent.
The eight key industries shrank 3.1 per cent in sequential order.
Growing industry
For the second consecutive month, coal continued to grow by double digits, increasing by 14.8 per cent in June over the previous month's 10.2 per cent. Conversely, cement expanded by 2.7 per cent after contracting by 1.6 percent in May.
Fiscal Deficit Q1 FY25
Meanwhile, India's fiscal deficit narrowed to 8.1 per cent of the full-year estimate at Rs 1.36 lakh crore in the first quarter of FY25, official data revealed. In the corresponding period of the previous year, the deficit stood at 25.3 per cent.
Finance Minister Nirmala Sitharaman reaffirmed the Center's commitment to reducing the fiscal deficit to 4.5 per cent of GDP (gross domestic product) by FY26 during the Budget 2024 presentation.
In the July 23 Bugdet, the government maintained its capital spending target of Rs 11.11 lakh crore.
