Like industrial output, core sector index too slumps

Mirroring the downturn in the industrial output figures that were released on Monday, six core industries in the infrastructure...

Mirroring the downturn in the industrial output figures that were released on Monday, six core industries in the infrastructure space too have posted a dismal six per cent growth in September 07 as against 10.6 per cent growth in the same period last year. Growth for the April-September period of the current fiscal also stood at just 6.6 per cent, compared with 8.7 per cent in the same period last year, reveals the latest official figures.

Among the six key infrastructure industries, which contribute 26.7 per cent to the overall Index of Industrial Production (IIP), crude petroleum production put up the worst

performance with negative growth of 0.7 per cent in September, against 9.4 per cent growth in the year-ago period. Growth in the petroleum refinery sector too plunged at 6.9 per cent, half of what it posted last year.

The power sector fared no better, with electricity generation growing at a sluggish 4.3 per cent, compared to a robust 11.5 per cent growth in September last year. Cement too, failed to impress with a lackluster 5 per cent growth as compared to a 16.5 per cent last year.

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The only sector that displayed positive growth was coal, which turned the tables from a negative 0.8 per cent to a positive 6.2 per cent growth this September. Finished steel retained its double-digit growth of over 10 per cent.

The infrastructure growth reflects a larger slowdown in industrial growth in the country, which this year stood at just 6.4 per cent in September as compared to 12 per cent last year. However, Finance Minister P Chidambaram has said it was too early to judge if a slowdown had set it, and that “overall services and industry are likely to grow at nine to 10 per cent this fiscal.”

In the midst of soaring global crude prices, growth in domestic crude production between April and September 2007 was up by a mere 0.7 per cent as compared to 4.1 per cent a year ago. Refinery products grew 9.8 per cent in the first half of this year against 12.3 per cent last year.

Despite a bad showing in September, electricity generation grew by 7.6 per cent as against 6.7 per cent last year, largely due to better performance in the earlier months of the current fiscal. The cement sector too seems to be reeling from capacity constraints, leading to 8.3 per cent against 10.6 per cent in April-September last year. Finished steel also displayed a stifled growth of 6.6 per cent for the first half, against 12.2 per cent last year.