New Delhi, Sept. 2: The core sector grew 3.1 per cent in July, the highest in four months, because of increases in electricity, steel and coal production. However, this is lower than the growth rate of 4.5 per cent in July 2012. The infrastructure sectors have seen a growth rate of just 0.1 per cent in June, while in April and May the expansion rate was 2.3 per cent.
The output of eight infrastructure industries accounts for almost 38 per cent of the index of industrial production. Petroleum refinery products grew 5.1 per cent in July over a high 26 per cent in July last year and 2.3 per cent last month. Steel grew 7 per cent against 1.1 per cent in the same period of last year and 3.4 per cent last month. Electricity, which had contracted to 1.2 last month, grew 5.2 per cent against 2.7 per cent a year ago.
Garima Kapoor, economist with Yes Bank, said, “The rebound in electricity generation was led by hydro power generation. We expect thermal power generation to recover by the second half of the fiscal, supported by project approvals by the government. While the jump in the steel sector is encouraging, it may be too early to pronounce it as a recovery. After the monsoon, the cement sector may witness some recovery although the weak construction activity may limit the upside.”
However, the output of natural gas contracted 16.1 per cent. Crude shrunk 2.3 per cent against a contraction of 0.7 per cent in the same period last year and 0.6 per cent last month. Coal output grew 1.2 per cent in July after contracting 3 per cent in June.