The growth in the production of eight key infrastructure sectors contracted 1.8 per cent in August this year due to a decline in the output of coal, crude oil, natural gas, refinery products, cement and electricity, according to official data released on Monday.

The growth rate was 6.1 per cent in July. The growth of core sectors was 13.4 per cent in August 2023.

During April-August this fiscal, the output of core sectors rose 4.6 per cent against 8 per cent in the same period last fiscal. The eight core sectors contribute 40.27 per cent to the Index of Industrial Production (IIP) which measures overall industrial growth.

Deficit gap

The centre’s fiscal deficit reached 27 per cent of the full-year target by the end of August, underscoring a tighter fiscal position compared with last year, according to government data released on Monday.

The deficit — the gap between expenditure and revenue — stood at ₹4.35 trillion as of August, according to figures from the Controller General of Accounts (CGA).

In comparison, the fiscal deficit had hit 36 per cent of the budget estimates during the same period in the previous fiscal year.

In the budget, the government, set a target to reduce the fiscal deficit to 4.9 per cent of the gross domestic product (GDP), down from 5.6 per cent in 2023-24. In absolute terms, the fiscal deficit is expected to be contained at ₹16.13 trillion by the end of the current financial year.

The reduction in the fiscal deficit vis-a-vis a year ago was supported by the RBI’s dividend payment as well as a contraction in capital expenditure, Aditi Nayar, chief economist at Icra, said. The deficit for August alone surged to ₹1.6 trillion compared with just ₹0.4 trillion in August 2023.