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Core sector growth runs out of steam, slides to 4 pc in Sept

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    Growth in infrastructure sector output slipped to 4 per cent in September from an upwardly revised 7.8 per cent in August, data released by the commerce and industry ministry showed on Wednesday.

    This would likely result in lower growth in the index of industrial production (IIP), which grew in double digits — 10.4 per cent in August — after a gap of 22 months. The infrastructure sector — comprising cement, coal, steel, electricity, crude oil and petroleum refinery products — accounts for almost a third of the IIP. Growth in the core six stood at 4 per cent in September 2008.

    “IIP for September will not be in double digits,” confirmed DK Joshi, principal economist at rating agency Crisil. In the first half of the fiscal, though, infrastructure output growth was at 5 per cent, up from 3.4 per cent in the same period last year. Chief statistician Pronab Sen said IIP growth is unlikely to match the August pace, which was buoyed by a low base-year growth of 1.7 per cent in the same month last year.

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    Coal and cement, which topped the charts in August with growth rates of 12.95 per cent and 17.6 per cent, respectively, slipped to 6.5 per cent each in September. Electricity generation grew 7.5 per cent, against 4.4 per cent last September, while petroleum refinery product output expanded by 3.45 per cent against 2.8 per cent.

    Finished steel production declined by 0.4 per cent, against 2.1 per cent. Crude oil remained in the negative zone with a 0.5 per cent decline in September, compared with 0.4 per cent. Crude oil production in H1 was (-) 1.25 per cent, compared with 0.8 per cent in the corresponding period last year. Petroleum refinery products slipped to (-) 3.6 per cent from a positive 4.5 per cent in the first six months of last fiscal. Coal production grew 11.6 per cent in the first half of the fiscal, up from 8 per cent in the same period last year.

    ... contd.

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