Driven by coal and electricity, the performance of the country’s eight core industries jumped back on track in June 2016 posting a 5.2 per cent growth over the same month previous year.
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The eight core sectors comprise almost 38 per cent of the total industrial production.
Industrial products saw high growth, such as television which rose 79 per cent, rolled steel grew 23.5 per cent, automobiles increased 22 per cent and animal feed jumped 19.7 per cent, besides cement that rose 15.7 per cent and liquefied petroleum gas (LPG) by 14.8 per cent.
According to it, coal production, which has a weight of 4.38% in the IIP, increased by 12.0 % in June, 2016 over June, 2015.
“While the pickup in overall core sector growth is heartening, the disaggregated performance was fairly mixed across the constituents with double digit growth in coal and cement interspersed with continued contraction in crude oil and natural gas”, said rating agency ICRA, senior economist Aditi Nayar.
The cumulative ECI growth during April-June was 5.4 % over the same quarter previous year, according to the data furnished here by the Commerce Ministry.
Fertilizer production (weight: 1.25%) increased by 9.8 % in June, 2016 over June, 2015.
Electricity generation, which has the highest weightage of 10.32 per cent in the IIP, augmented by 8.1 per cent in June, compared with the corresponding month of 2015.
The core sector had expanded by 2.8 per cent in May this year, slowest in 2016 till date.
Steel production, the second most important component as per weightage of 6.68 %, increased by only 2.4 % in the month under review. Speaking to CNBC-TV18, Soumya Kanti Ghosh, Chief Economic Advisor, State Bank of India, said he is skeptical of these numbers supporting IIP numbers going ahead.
Cement production (weight: 2.41%) increased by 10.3 % in June, 2016 over June, 2015.
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“Cement and coal output will moderate as the monsoon has begun and this will reflect in the core sector growth number”. Similarly, in March, the sector posted a 6.4 per cent growth while IIP grew just 0.05 per cent.
