Page 31 - Policy Economic Report- June'26

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

• Natural Gas – Natural gas production (weight: 6.88 %) declined by 4.9 % in May 2026 over May
2025. Its cumulative index fell by 4.5 % during April–May 2026–27 compared with the
corresponding period of the previous year.

• Petroleum Refinery Products – Petroleum refinery production (weight: 28.04 %) declined by 8.7
% in May 2026 over May 2025. Its cumulative index decreased by 4.7 % during April–May 2026–
27compared with the corresponding period of the previous year.

• Fertilizers – Fertilizer production (weight: 2.63 %) declined by 0.9 % in May 2026 over May 2025.
Its cumulative index fell by 4.5 % during April–May 2026–27 compared with the corresponding
period of the previous year.

• Steel – Steel production (weight: 17.92 %) increased by 5.0 % in May 2026 over May 2025. Its
cumulative index increased by 5.2 % during April–May 2026–27 over the corresponding period of
the previous year.

• Cement – Cement production (weight: 5.37 %) increased by 8.4 % in May 2026 over May 2025. Its
cumulative index rose by 8.3 % during April–May 2026–27 compared with the corresponding
period of the previous year.

• Electricity – Electricity generation (weight: 19.85 %) increased by 8.7 % in May 2026 over May
2025. Its cumulative index increased by 7.1 % during April–May 2026–27 compared with the
corresponding period of the previous year.

Overall, the performance of the core industries during May 2026 highlights a divergence within India's
industrial sector. While infrastructure-linked industries such as steel, cement and electricity continued to
record healthy growth, persistent weakness in fossil fuel production and refinery output constrained
overall expansion. Going forward, sustained public infrastructure investment and resilient domestic
demand are expected to support industrial activity, although higher global energy prices and supply-side
constraints may continue to weigh on the energy sector in the near term.

8. World Bank supports India's reform agenda to boost growth and employment

In a significant endorsement of India's ongoing structural reform agenda, the World Bank Group
approved US$1.5 billion in financing on 18 June 2026 under the Boosting Job Creation in the Private Sector
Development Policy Financing (DPF) Operation. The programme aims to strengthen private sector-led
growth, improve the investment climate, enhance labor market efficiency, and accelerate employment
generation, particularly for the nearly 11 million young people expected to enter India's labor force each
year over the next two decades.

The financing supports a broad set of policy reforms designed to reduce barriers to private investment,
improve the business environment, facilitate easier access to finance for enterprises, and strengthen labor
market institutions. It complements the Government of India's ongoing initiatives under the Make in
India, Digital India, and infrastructure development programmes, while encouraging greater participation
of the private sector in manufacturing, services, and high-productivity industries. The programme also
seeks to improve opportunities for women and youth through enhanced workforce participation and skills
development.

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