Core Sector Output Rises 3.2% in August

India's core sector output rose 3.2% in August thanks to a sharp rise in steel production and a pick-up in cement, suggesting a lift in infrastructure and construction activity. Experts said the data was positive but not vigorous enough to suggest a dynamic revival in industrial activity.
Steel production rose 17% to a 37 month high, aided by the low base of last year, while cement output was up 3.1% compared with a 1.4% rise in July. July core sector growth was revised down to 3% from the 3.2% estimated initially.
The index measures output in eight infrastructure sectors -steel, cement, coal, refining, natural gas, crude oil, fertilisers and electricity generation. It has a 38% weight in the index of industrial production (IIP) and the latest data suggests an improvement, albeit muted, over July's 2.4% contraction. August IIP data will be released on October 12.
April-August core sector growth was 4.5% compared with 2.4% in FY16. The data will be among the inputs weighed by the monetary policy committee as it decides on whether to cut interest rates to try and boost growth or maintain status quo at the October 4 review.