Core sector grows 11.6% in August on a weak basis
Eight basic infrastructure industries recorded an 11.6% increase in output in August, capitalizing on a weak base from the previous year and continuing the strong growth that began in March.
The production of the coal, crude petroleum, natural gas, refining products, fertilizers, steel, cement and electricity industries represents two-fifths of the weight of the elements included in the index. industrial production (IIP).
Data released by the Ministry of Trade and Industry showed that with the exception of crude oil and fertilizers, all other sectors recorded production growth. During the period from April to August of fiscal 22, the core sector grew by 19.3% compared to the period of the previous year. A lull in the monsoon rains in August boosted coal, cement and electricity, and increased mobility that supported the growth of petroleum refinery products, experts said. In July, growth in the basic sector was slightly below 9.9%.
“Base production showed an encouraging increase of 3.9% in August 2021 compared to the pre-covid period of August 2019, led by all subsectors except refined products and crude oil “said Aditi Nayar, chief economist at rating agency Icra Ltd.
Meanwhile, core sector growth data for May has been revised to 16.4% from the provisional level of 16.8%.
While coal and natural gas production jumped 20.6% each in August from a year earlier, refined products jumped 9.1%. Production of steel, cement and electricity improved 5.1%, 36.3% and 15.3%, respectively, in August, according to the data. At the same time, crude oil production fell 2.3% and fertilizer production fell 3.1%.
The economic recovery was also reflected in the public finances for the period April-August. The budget deficit of the Union government amounted to ??4.68 lakh crore at the end of August, hitting 31.1% of the budgeted level, showed official data from the Comptroller General (CGA). According to the budget forecasts made in February, the Centre’s gap between income and expenditure to be covered by loans is greater than ??15 lakh crore. In the first five months of the previous fiscal year, the Centre’s budget deficit had exceeded the target for the entire year as revenue declined due to the strict national lockdown aimed at tackling the pandemic and spending requirements for deal with the situation increased.