Core sector grew at 7.3% clip in June

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Index of industrial production could be 5%, up from 1.2%

Cement and electricity pushed up eight core infrastructure industries' growth to a nine- month high in June at 7.3 per cent, signaling pick-up in the hitherto moribund economy, monthly official date released on Thursday said.

The eight core sector industries accounted for nearly 40 per cent of industrial output in the country and this had enthused economists, who said the index of industrial production for June expected to be released in the second week of August could be over 5 per cent as against a mere 1.2 per cent in June last year.

Coal, crude oil, cement and electricity recorded a growth of 8.1 per cent, 0.1 per cent, 13.6 per cent and 15.7 per cent respectively.

Rating agency Icra said: "The double-digit growth in merchandise exports with the sharp improvement in core sector growth suggest that growth of industrial production in June could be as high as 5-6 per cent." India’s exports grew by 10.22 per cent to $26.4 b in June.

They also indicated improvement in business sentiment and return of the feel-good factor, analysts said.

The core sector had recorded growth of 8 per cent in September 2013. In May 2014, the growth was 2.3 per cent.

Natural gas and fertiliser output recorded a negative growth of 1.7 per cent and 1 per cent respectively, according to the data of the commerce and industry ministry.

Refinery products output growth slowed down by 1.2 per cent as against 1.8 per cent in June last year. Similarly, steel production too declined by 4.2 per cent in June from 7.6 per cent in the same month last year.

During April-June, growth in the eight core industries grew by 4.6 per cent from 3.7 per cent in the year-ago period.

krsudhaman@mydigitalfc.com

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