The output of eight core infrastructure sectors slowed down to 4.5 per cent in July — the lowest in six months — against 9.9 per cent in the year-ago period, according to official data. The output of these infrastructure sectors expanded 13.2 per cent in June, 19.3 per cent in May, 9.5 per cent in April, 4.8 per cent in March, 5.9 per cent in February and 4 per cent in January.

The production growth of eight infrastructure sectors — coal, crude oil, natural gas, refinery products, fertiliser, steel, cement and electricity — was 11.5 per cent in April-July this fiscal against 21.4 per cent a year ago.

Crude oil and natural gas production contracted 3.8 per cent and 0.3 per cent, respectively, during the month under review. “The ongoing recovery still has a long way to go because the output of some core segments is lower than the pre-pandemic level. The coal output despite registering double-digit growth in July 2022 is still only 77.6 per cent of the pre-Covid production level (February 2020).

“Even the output of the cement sector is only 98 per cent of the pre-Covid level,” Sunil Kumar Sinha, principal economist, India Ratings and Research, said. Besides, on a seasonally adjusted month-on-month basis, the core sector output in July 2022 shows a contraction of 1.2 per cent over June 2022. The core sector output has now declined sequentially for three consecutive months.

“We expect the core sector to grow around mid-single digits in August 2022,” Sinha said. Commenting on the numbers, domestic rating agency Ind-Ra said the ongoing recovery has still a long way to go.

Fiscal deficit

The fiscal deficit touched 20.5 per cent of the annual target at the end of July against 21.3 per cent a year ago, data released on Wednesday showed. In actual terms, the fiscal deficit — the difference between expenditure and revenue — was Rs 340,831 crore during the April-July period this financial year.

According to data released by the Controller General of Accounts (CGA), the government’s receipts, including taxes, stood at Rs 7.85 lakh crore or 34.4 per cent of the budget estimates (BE) for 2022- 23. It was nearly the same during the year-ago period at 34.6 per cent.

The tax revenue stood at Rs 6.66 lakh crore or 34.4 per cent of this year’s BE. Last year, too, the government had managed to mop 34.2 per cent of its annual estimate from April-July.

The data further revealed that the central government’s total expenditure was Rs 11.26 lakh crore or 28.6 per cent of the BE 2022-23, almost same as in the year-ago period. Capital expenditure was 27.8 per cent of the full-year budget target compared with 23.2 per cent in the corresponding period last year.

For 2022-23, the government’s fiscal deficit is estimated to be Rs 16.61 lakh crore or 6.4 per cent of the GDP. “Unless the Pradhan Mantri Garib Kalyan Ann Yojana is extended, we do not expect the fiscal deficit to exceed target, ” Aditi Nayar, chief economist, Icra, said.