At 7.3%, June core sector growth hits nine-month high

DK Joshi, chief economist, Crisil, said, “Cement production is generally good when the monsoon is low.

By: ENS Economic Bureau | New Delhi | Published:August 1, 2014 1:04 am

Buoyed by robust performance of the electricity and cement sector, eight key infrastructure industries grew at a nine-month high of 7.3 per cent in June, compared to 2.3 per cent a month ago.

The growth was also helped by the fact that these industries had grown only 1.2 per cent in June 2013, giving the advantage of a low base effect. However, experts said the economy may be in for a “mild revival” in the second half of the current financial year.

According to the core sector data released by the commerce and industry ministry, the electricity generation more than doubled in June to grow by 15.7 per cent compared to 6.3 per cent in May. The sector had shown a flat growth during the corresponding period last fiscal. Further, cement production grew 13.6 per cent during the month compared to 8.7 per cent in May and 2.6 per cent in June 2013.

DK Joshi, chief economist, Crisil, said, “Cement production is generally good when the monsoon is low. Over the last few months, IIP and core sector data have shown improvement. The IIP for the month is expected to be good.”

Core sector has a weight of 37.90 per cent in the index of industrial production (IIP), and June IIP numbers are expected to be released on August 12. Overall, core sector growth in April-June FY15 stood at 4.6 per cent compared to 3.6 per cent in FY14.

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