Core sector grows 8%, deficit at 33.9% of FY24 target

It’s a day for a slew of economic data. While all eyes were on GDP, there are a few other important indicators that are released. Out of them 8 core sector data and fiscal deficit numbers hold an important position. For the period of April to July, fiscal deficit number came at Rs 6.06 lakh crore. It has increased from 4.51 lakh crore for April-June period. For April-July period, the fiscal deficit is 33.9% of the total target for the fiscal year 2023-24. For the whole year 2023-24, the government has pegged the target of 5.9% of GDP.

Coming on to eight core sectors. The overall index of eight core sectors increased 8% (YoY) in July. The core sector sincludes steel, coal, electricity, natural gas, refinery products, crude oil, fertilizers and cement. The YOY growth dropped marginally from the previous month. As in June the index grew at 8.3% (YOY). These eight industries account for 40.27% of the total Index of Industrial Production. The coal sector witnessed 14.9% (YOY) increase, crude oil increased 2.1% (YOY), 8.9% growth was witnessed in natural gas, petrol saw an increase of 3.6%, fertilizer 3.3%, cement 7.1% and electricity recorded a growth of 6.9% on a yearly basis.

Going ahead there are lot of concerns regarding economy. Monsoon is erratic and if it remains deficient and uneven then there will be a huge impact of rural economy. The El-Nino effect can be clearly seen on the rains. . Due to this retail inflation also shot up 15-month high in July to come at 7.44%. RBI has also increased its inflation target to 5.4% from 5.1%. At the same time, this also implies that interest rates may remain elevated for quite some time. On global front also situation is not very positive.