Why core sector growth slows
Growth in India’s eight core sectors slipped to a 20-month low of 4% in June from an upgraded 6.4% rise in May,
with most sectors barring coal recording a sharp slide in output growth
Coal output grew 14.8%, the fastest pace in eight months
However, electricity generation slipped to a four-month low of 7.7% in June amid a heat wave in many parts of the country
The decline in core sectors’ growth during June could possibly be attributed to
lower spending on Government capex before the General Elections and
the slowdown in construction activity which has led to a temporary slack in demand for steel and cement
Index of Industrial Production (IIP) had grown at a seven-month high pace of 5.9% in May but is expected to decelerate in June , with the dip in the core sector growth
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