Growth of eight core industries slowed down to 2.1 per cent in July as against 7.3 per cent in the same month last year, according to a government data released Monday. According to the data, the output of coal, crude oil, natural gas and refinery products recorded negative growth in July.
The eight core sector industries – coal, crude oil, natural gas, refinery products, fertiliser, steel, cement and electricity – had expanded by 7.3 per cent in July last year. During April-July, the eight sectors grew by 3 per cent compared to 5.9 per cent in the same period the previous year.
These core industries comprise 40.27 per cent of the weight of items included in the Index of Industrial Production (IIP).
Growth rate in production of steel, cement and electricity declined to 6.6 per cent, 7.9 per cent and 4.2 per cent, respectively, as against 6.9 per cent, 11.2 per cent and 6.7 per cent.
However, fertiliser output marginally grew by 1.5 per cent in July as against 1.3 per cent in July 2018.
For April-July period, the eight sectors growth rate almost halved to 3 per cent as compared to 5.9 per cent in the same period last year.
The growth rate of these eight sectors are declining since April this year. It slowed down to 5.2 per cent in April from 5.8 per cent. Then it came down to 4.3 per cent in May and 0.7 per cent in June.
The data comes at the backdrop of weak manufacturing and consumption numbers dragging the country’s GDP growth to a 25-quarter low of 5 per cent in the first quarter (April-June) of the current fiscal. The GDP growth rate has now slowed for the fifth consecutive quarter with the previous low recorded at 4.3 per cent in March 2013.
The data showed that the growth has slowed down in five out of eight sectors, reflecting the widespread weakness in the overall economy.
In April-June, manufacturing growth slumped to 0.6 per cent as against double-digit growth of 12.1 per cent last year, while the “agriculture, forestry and fishing” sector recorded a growth rate of 2.0 per cent as against 5.1 per cent last year. GVA growth for the construction sector also slowed to 5.7 per cent in April-June from 9.6 per cent year ago.
The Reserve Bank of India, in its Annual Report for 2018-19 released last week, had suggested that the recent deceleration in the economy could be in the nature of a soft patch mutating into a “cyclical downswing”, rather than a “deep structural slowdown” and that its disaggregated analysis confirmed that a broad-based cyclical downturn is underway in several sectors — manufacturing, trade, hotels, transport, communication and broadcasting, construction and agriculture.