Economic Freefall: Growth in 8 Core Industries Slides to 2.1% in July from 7.3% Last Year

New Delhi: The economic slump in the country is getting compounded by the day with bad news pouring in almost every day. Close on the heels of the reported GDP growth under the Modi government reaching a six-year low in the April-June quarter, comes another news that the growth of the country’s eight core industries has plunged to 2.1% in July, against 7.3% in the same period last year, according to official data released on Monday. This is marginally up from June this year, when core sector growth rate was 2%.

The growth has been pulled down mainly due to contraction in coal, crude and oil and natural gas production, says government data released on Monday. In fact, growth in coal output went negative in July at -1.4% from 9.8% in the same month last year.

The eight core sector industries -- coal, crude oil, natural gas, refinery products, fertiliser, steel, cement and electricity -- comprise 40.27% of the weight of items included in the Index of Industrial Production (IIP).

Ouput of crude oil, natural gas and refinery products also recorded negative growth during the month under review. Crude oil output which was negative at -5.4% in July 2018, was at -4.4% in July this year, natural gas was at -0.5% from -5.2% in the same period last year, but the worst fall was seen in refinery products which plunged to -0.9% from 12.3% in July last year.

Similarly, growth rate in production of steel, cement and electricity declined to 6.6%, 7.9% and 4.2%, respectively, against 6.9%, 11.2% and 6.7%.

However, fertiliser output marginally grew by 1.5% in July against 1.3% per in July 2018.

For April-July period, the eight sectors’ cumulative growth rate almost halved to 3% as compared to 5.9% in the same period last year.

The growth rate of these eight sectors are declining since April this year. It slowed down to 5.2% in April from 5.8%. Then it came down to 4.3% in May and 0.7 per cent in June.

The GDP data too has shown deceleration with the growth rate coming down to over six year low of 5% in the first quarter of the current fiscal, mainly on account of sharp dip in manufacturing sector, which registered almost a flat growth of 0.6% per cent.