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Core sector growth at 4.4% in May

In yet another sign of recovery of economic growth, the core sectors grew fastest in 6 months.

Output of the eight core infrastructure sectors increased 4.4 per cent in May 2015 (year-on-year), the fastest in six months, following two months of contraction. The growth was driven mainly by expansion in production of refinery products, coal and electricity.

Natural gas was the only item that suffered a contraction in production during the month. While other sectors namely, cement, steel, fertiliser and crude oil, too, posted increases, although at lower rates.

Petroleum refinery production rose highest by 7.9 per cent, followed by coal production which increased by 7.8 per cent. The production of natural gas contracted 3.1 per cent during the month.

One reason for the growth is a significant jump in government spending on infrastructure.

What is Core sector?

  • There are eight core industries in an economy. They are called ‘core’ because their production level impacts almost all other economic activities
  • They are: Coal, fertilizer, electricity, crude oil, natural gas, refinery products, steel, and cement
  • The eight core industries account for about 38 per cent of the country’s industrial production.
  • Growth in core sector means growth in manufacturing and infrastructure. This means more number of jobs and capacity addition.