The growth rate of the Indian core sector in November 2024 was 4.3 percent, which was 7.9 percent in November last year. This decline has come due to the slowdown in various sectors of the industry. However, this rate was 3.7 percent in October 2024, which is slightly better than November.

The core sector comprises eight key sectors: coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity. These sectors contribute 40.27 per cent to the Index of Industrial Production (IIP).

Decline in key areas

Production of crude oil and natural gas declined in November 2024. Apart from this, production of coal, refinery products, fertilizers, steel and electricity registered a growth of 7.5 percent, 2.9 percent, 2 percent, 4.8 percent and 3.8 percent respectively. There was a very good increase in the production of steel, coal and refinery products compared to last year.

At the same time, cement production increased to 13 percent, which is a positive sign.

Fiscal deficit in the current financial year

The fiscal deficit of the Government of India has reached 52.5 percent of the target set for the financial year by the month of November of the current financial year (2024-25). According to the data of CGA, the fiscal deficit of the government from April to November was Rs 8.47 lakh crore, which is more than half of the overall fiscal target.

In the Union Budget, the government has targeted to keep the fiscal deficit at 4.9 percent of GDP in this financial year, whereas it was 5.6 percent in the last financial year.

Overall, the slow growth of the core sector and the rising fiscal deficit in November 2024 are worrying signs for the Indian economy. Although some sectors have witnessed positive growth, the rising fiscal deficit may make it challenging for the government to maintain fiscal discipline.