Ministry of Commerce and Industry published the 8 core sector growth rate for the month of August, 2019. The eight core sector industries are coal, crude oil, natural gas, refinery products, fertilizer, steel, cement and electricity. The core sectors contracted by over 0.5 % as against a expansion of 4.7% in the same month last year. This has been the lowest since November, 2015 when the core sector growth stood at -1.5%.
Five of the 8 sectors registered negative growth in the month of August, 2019. Only fertilizer, steel and refinery products registered positive growth.
Indian Economy has registered the lowest growth of last 6 years in the first quarter of FY 2019-20. The GDP growth stood at 5% as against 8% in the same quarter in the previous financial year. There has been a steady decline in the growth rate for over 3 quarters. There are signs of slowdown in the economy. There is a significant lack of demand in the economy.In this backdrop, the negative growth in the core sectors makes the situation more alarming.
The Government of India has taken a sector wise approach and announced host of incentives to different sectors. But whether this is enough for the economy to bounce back or more drastic steps are required to boost up demand and ensure revival of the economy is to be seen.