India: Output of Eight Core Industries contracted in August 2019

(15 October 2019), India’s infrastructure sector, which comprises core eight industries, contracted 0.5 percent Y-o-Y in August 2019 compared to growth of 4.7 percent in August 2018. The contraction was mainly due to the decline in the five industries: Coal (8.6 percent), crude oil (5.4 percent), natural gas (3.9 percent), cement (4.9 percent), and electricity (2.9 percent). However, refinery products, fertiliser and steel production grew 2.6 percent, 2.9 percent and 5 percent respectively.

This was the first contraction since April 2015, reflecting weakness in the economy. However, government of India and RBI have taken some measures such as cut in corporate tax rate and policy rate to spur investments and revive the economy. These measures will help to revive these core sectors in the coming months.