Growth of eight core industries slipped to 3.6 per cent in June against four per cent in May, on the back of contraction in natural gas, fertilisers and steel output. This will impact overall economic growth, given that agriculture might also remain lacklustre due to a weak monsoon.
The eight core industries have a combined weight of 38 per cent in the Index of Industrial Production (IIP). Industrial growth contracted for March and April before growing by just 2.4 per cent in May. The May core data was revised downward to 3.8 per cent from 4.6 per cent.
In April-June, the core industries growth was just 3.6 per cent down from 5.2 per cent in the same period last year.
According to economists, the IIP for June will also be weak, affecting the overall gross domestic product for the first quarter.
Coal remained in the positive zone for eight consecutive months, raising hopes of a revival in the mining sector. Its output expanded 7.2 per cent in June, lower than the eight per cent in May. Mining is impacted by natural gas, which continues to contract. Natural gas output declined 11.1 per cent in June.
Economists said natural gas production from the Krishna Godavari-D6 fields has come down and supply constraints in this sector need to be addressed.
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Crude oil production contracted 0.8 per cent during June.
Steel and fertiliser production shrunk 0.5 per cent and 11.7 per cent, respectively, during the month.
Cement and petroleum refinery output grew 10.2 per cent and 6.1 per cent, respectively.