India's Core Industries Growth Slows to 0.5% as Domestic GST Revenue Falls 2.6%
Updated
Updated · The Hindu · Jun 23
India's Core Industries Growth Slows to 0.5% as Domestic GST Revenue Falls 2.6%
1 articles · Updated · The Hindu · Jun 23
Summary
India’s eight core industries grew just 0.5% in May, the second-lowest reading in 21 months, adding to signs of a broader economic slowdown.
Domestic demand appears to be the main weakness: GST revenue from domestic transactions fell 2.6% in May, while average growth over the past six months was only 3.1% despite record merchandise exports.
Oil, natural gas and coal output all contracted, with domestic crude and gas extending multi-year declines and coal posting its sharpest drop in nearly a year.
Fertilizer output also shrank 0.9% in May, though less sharply than two months earlier, as weaker gas supply fed through to the sector.
Low real wage growth, rising inflation and a deficient monsoon risk are intensifying pressure on households, exposing structural weaknesses that predated the West Asia crisis.
With the West Asia crisis exposing extreme vulnerabilities, why is India's own domestic energy production continuing to shrink?
As slowing demand and the rise of AI threaten jobs, is India's consumption-led growth model facing an existential crisis?
Amidst economic weakness, are India's cash handouts a sustainable solution or a diversion from overdue structural reforms?
May 2026: India's Core Sector Growth Hits 7-Month Low at 0.5% as Energy Output Falls, Imports Drive GST Revenue
Overview
In May 2026, India's eight core industrial sectors saw a sharp slowdown, with overall growth dropping to just 0.5%. This deceleration was mainly caused by contractions in five key areas: petroleum refinery products shrank by 8.7%, coal production fell by 9.3%, crude oil output dropped 4.6%, natural gas declined 4.9%, and fertiliser production slipped 0.9%. These declines in major energy and fuel sectors weighed heavily on industrial performance, highlighting the challenges facing India's core industries and signaling broader pressures on the country's economic momentum.