Core sector industries grow by 0.1% in Oct

Contraction in the key industries such as coal,natural gas,fertiliser and crude oil,pulled down the growth of the eight core sector industries to 0.1 per cent in October

Contraction in the key industries such as coal,natural gas,fertiliser and crude oil,pulled down the growth of the eight core sector industries to 0.1 per cent in October,the lowest in five years,against 7.2 per cent registered during the corresponding period last year. In September,it had stood at 2.3 per cent.

According to data released by the government today,while coal production contracted by 9 per cent in October against a contraction of 17.8 per cent during last month,natural gas production contracted by 7.4 per cent as against a contraction of 6.4 per cent during the last month.

The eight infrastructure industries,which include crude oil,petroleum refinery products,natural gas,fertilisers,coal,electricity,cement and finished steel,have a weight of 37.90 in the index of industrial production or IIP. The growth in core sector is likely to adversely impact IIP numbers due on December 12.

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Except electricity,cement and steel,all sectors registered negative growth in October,raising concern for the industry and government.

While steel production almost halved to 3.8 per cent during the month,electrocyt generation stood at 4.9 per cent as against 8.8 per cent during September.

Cement production was almost nil during the month against 1.8 per cent during last month,reflecting a moderation in construction activity,hit by high interest rates.

The central bank has raised key policy rates 13 times to tame stubbornly-high inflation,leading to increased cost of credit.

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We are in troubled times. The government must focus on strong reform measures to prevent further deterioration, Rajiv Kumar,Ficci,general secretary said.

Industry has argued that the tight monetary policy stance of the RBI is hurting fresh project investments,thereby slowing factory output.

Halting growth

* Crude oil,petroleum refinery products,natural gas,fertilisers,coal,electricity,cement and finished steel have a weight of 37.90% in the overall IIP

* Barring electricity,cement and steel,remaining segments registered negative growth in October

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* Electricity generation and steel output grew by 4.9% and 3.8% in October against 8.8% and 13.4% respectively in the same month of the previous year

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