July Core sector growth @ 3.1%

The core sector number released brought some cheer and pointed to a faint recovery in the eight key infrastructure industries.
Government data showed the core sector spanning coal, crude oil, natural gas, petroleum refinery products, fertilizers, steel, cement and electricity rose 3.1% in July, lower than the 4.5% expansion in July 2012 but higher than the 0.1% growth in June.
The sector, which accounts for nearly 40% of the index of industrial production (IIP), should help add some muscle to the July factory output data to be released later this month. But economists said it was difficult to predict a trend based on a month’s data.
The industrial sector has remained sluggish for more than a year, adding to the headache of authorities battling a broader economic slowdown. Economic growth has been hit by the global economic slowdown, high interest rates, the rupee’s sharp slide against US dollar and a stubborn inflation.
Industrial production contracted 2.2% in June dragged down by a 2.2% decline in the manufacturing sector. India Inc has urged the government to take urgent measures to tackle the slowdown. The government has taken several measures to fast-track pending projects and expects growthto pick up once they come on stream.
Several sectors among the eight crucial industries have been posting a decline for the past few months. Monday’s data showed the crude oil and natural gas sectors were the only laggards. Crude oil contracted 2.3% in July while natural gas segment fell 16.1% year-on-year in July. Data showed the coal sector rose 1.2% in July compared to the year-ago month, while petroleum refinery production grew 5.1% in July 2013 compared to July 2012.