The country's core sector comprising basic industries like coal, electricity, steel, and cement, grew 6.1% in July against a slower 4% rise the previous month. According to data released by the Commerce Ministry, during the first four months of the current financial year 2024-25, the growth rate for these eight core sectors attained 6.1%, against 6.6% recorded during the same period last year.
However, Base Metals did well with the Index of Eight Core Sector Industries, which essentially gauges the output of cement, coal, crude oil, electricity, fertilizers, natural gas, refinery products, and steel that account for 40 percent of the Index of Industrial Production, or IIP. In July, steel output reached a three-month high of 7.2 percent against 6.7 percent last month.
Cement output jumped to a four-month high of 5.5% from the earlier 1.9%, indicating an uptick in construction activity. Production of petroleum products jumped to an eight-month high of 6.6%. Fertilizer production was up 7.3% against 5.6% year-ago period. It touched a seven-month high of 5.3% due to improved kharif sowing on account of better monsoon. Coal output rose 6.8% and electricity generation improved 7.0% in July.
However, crude oil production continued to contract for the fourth successive month in April. So also natural gas output that fell during the month. The Finance Ministry does not share such pessimism. It reports in its July report: "Economic momentum continues unabated in India. Although the monsoon is somewhat irregular, the reservoirs are well replenished. There has been an expansion of the manufacturing and services sectors as reflected in the Purchasing Managers' indices.".
It also pointed out that there is robust growth in tax collections, specially indirect taxes, indicating healthy transactional activity. Bank credit is growing, inflation is tapering off, and both merchandise and services exports are doing better than a year ago. The stock markets are holding their level, and foreign direct investment is growing, with inflows rising.
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