Output of eight core industries contracted by 15 per cent in June on account of decline in production of coal, crude oil, natural gas, steel, cement and electricity. It is the fourth straight monthly contraction, according to the data released by the Commerce and Industry Ministry on Friday. The output of coal, crude oil, natural gas, refinery products, steel, cement and electricity declined by 15.5 per cent, 6 per cent, 12 per cent, 8.9 per cent, 33.8 per cent, 6.9 per cent, and 11 per cent, respectively.
In May, the sectors' output contracted 22 per cent. Other than fertilisers, all seven sectors had recorded negative growth in May. In March, the contraction was at 6.5 per cent, while output shrank 38 per cent in April. The eight core sectors in June 2019 had expanded by 1.2 per cent.
During April-June FY21, the sector's output fell 24.6 per cent as compared to a positive growth of 3.4 per cent in the same period previous year. The eight core industries account for 40.27 per cent in the Index of Industrial Production (IIP).
"In conjunction with the core sector industries, indicators of freight, fuel consumption and GST suggest that the uneven improvement recorded by the Index of Industrial Production in May 2020, continued in June 2020. Production appears to have been ramped up in various sectors in that month, to meet pent-up demand, with rural sentiment remaining resilient and urban consumption adjusting to a new normal. Based on the available data, we expect the IIP to display a contraction of 15-20 per cent in June 2020," said Aditi Nayar, Principal Economist, ICRA.
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