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Lockdown hits biz activity: May core sector output shrinks 23.4%

Overall growth has been hit by declining production in most core sectors, save for fertilisers, according to data shared by the Commerce Ministry Tuesday.

By: ENS Economic Bureau | New Delhi | Updated: July 1, 2020 2:25:12 am
Indian economy coronavirus Barring fertiliser, all seven sectors – coal, crude oil, natural gas, refinery products, steel, cement, and electricity – had recorded negative growth in May. (Representational Image)

Production in the eight core sectors of India’s economy contracted for the third month in a row, with output declining 23.4 per cent in May amid the pandemic and the ensuing lockdown. Overall growth has been hit by declining production in most core sectors, save for fertilisers, according to data shared by the Commerce Ministry Tuesday.

Core sector growth had plummeted by a record 37 per cent in April. The growth of the country’s eight core sectors — coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity — is a lead indicator of the monthly industrial performance. These sectors had grown by 3.8 per cent in May 2019, and their cumulative growth during the 2019-20 financial year was 0.3 per cent-— the lowest in eight years.

The steepest decline in May was observed in steel production, which dropped 48.4 per cent. This was followed by cement, which saw a 22.2 per cent fall, refinery products, which declined 21.3 per cent and natural gas production, which dropped 16.8 per cent.

Electricity production, which makes up nearly 20 per cent of the index, dropped 15.6 per cent in May, while coal production, which contributes around 10 per cent, dropped 14 per cent.

Fertiliser production, which accounts for nearly 3 per cent of the index, grew 7.5 per cent in May. Output in this sector had been on a decline for two consecutive months before this.

India records current account balance of $600 million in Q4

Mumbai: India’s current account balance (CAB) recorded a marginal surplus of $600 million (0.1 per cent of GDP) in the fourth quarter of 2019-20 as against a deficit of $4.6 billion (0.7 per cent of GDP) in Q4 of 2018-19 and $2.6 billion (0.4 per cent of GDP) in the preceding quarter (Q3 of 2019-20).

As per RBI data, the surplus in the current account in Q4 of 2019-20 was primarily on account of a lower trade deficit at $35 billion and a sharp rise in net invisible receipts at $35.6 billion, compared with the corresponding period of last year. There was a current account balance of $600 million in the first quarter of 2019-20.

For full fiscal 2019-20, the CAD narrowed to 0.9 per cent of GDP from 2.1 per cent in 2018-19 on the back of the trade deficit which shrank to $157.5 billion in 2019-20 from $180.3 billion in 2018-19. —ENS

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