Capex and spending double engine: Core strong; car dispatches hit a fresh high
India's infrastructure sector closed the September quarter on a firm note, while frantic festive demand lifted automobile dispatches to yet another record in October, highlighting the twin drivers of the economy — government capital expenditure and high-end consumption.
The Index of Eight Core Industries rose 8.1% in September from a year earlier, with coal, steel and electricity posting robust growth, data released on Tuesday showed.
It rose 8.4% in July and 12.5% in August, marking a strong quarter despite September growth slipping to a 4-month low.
Nearly 50% capex done
Separately, data compiled by ET showed carmakers in India are estimated to have dispatched a record 380,000-385,000 units during October, surpassing the September high of 362,000. This would imply 14.5% annual growth from a year earlier, the highest in more than a year.
A strong October lifted dispatches for the first 10 months to 3.45 million units, a growth of 9% on-year.
Government expenditure data released on Tuesday showed the government has already spent nearly 50% of its Rs 10 lakh crore capital expenditure budget for FY24, providing crucial support to the economy.
Additionally, high-end purchases of white goods and cars have provided a consumption boost.
Core index
The core index measures the output of eight key infrastructure sectors — coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity. It has a 40% weight in the Index of Industrial Production (IIP).
«A pickup in rainfall expectedly flattened the core sector expansion in September to a four-month low of 8.1%, from 12.5% in August, amid the slowdown in growth of seven of the eight constituent sectors, barring fertiliser output,» said Aditi Nayar,
