New Delhi, June 28 (Mayank Nigam) Driven primarily by coal, power, steel and natural gas production, India’s core sector output comprising key eight infrastructure components rose 6.3% year-on-year in May 2024. The core sector output had recorded 6.7% growth in April this year. “The combined Index of Eight Core Industries (ICI) increased by 6.3 per cent (provisional) in May, 2024 as compared to the Index in May, 2023. The production of electricity, coal, steel, natural gas and refinery products recorded positive growth in May 2024,” said Ministry of Commerce and Industry in a release on Friday. The Index of Eight Core Industries measures the combined and individual performance of production of eight core industries viz. cement, coal, crude oil, electricity, fertilizers, natural gas, refinery products and steel.
The eight core industries comprise 40.27% of the weight of items included in the Index of Industrial Production (IIP). As per official data, coal production increased by 10.2% in May, 2024 over May, 2023 while electricity generation increased by 12.8% during this period. Cement and crude oil production declined by 0.8% and 1.1% respectively in May, 2024 over May, 2023. Fertilizer production also declined by 1.7% year-on-year in May this year. Natural Gas production increased by 7.5% in May, 2024 over May, 2023. Petroleum Refinery production grew marginally at 0.5% on-year in May 2024. Steel production increased by 7.6% during the month under review.
“While the core sector growth sustained above 6% for the fourth consecutive month, it eased slightly to 6.3% in May 2024 from 6.7% in the previous month led by all the constituents except electricity and coal. A combination of factors including the heatwave over parts of the country and the phased Parliamentary Elections could have curtailed activity and execution in some sectors,” said ICRA chief economist Aditi Nayar while commenting on core sector data. “At the same time, the heatwave boosted demand for power, which translated into a rise in growth of coal and electricity in May 2024 as compared to the previous month. We expect IIP growth print at 4-5% in May 2024,” she added.