Core sector growth falls to 2.5% in September

The expansion of core industries slowed down primarily due to a dip in petroleum refinery and coal output. Analysts said the slower pace poses a dilemma for the Reserve Bank, which is slated to conduct its quarterly monetary policy review next week.

The core industries — crude oil, petroleum refinery products, coal, electricity, cement and finished steel — had expanded by 4.3 per cent in September 2009. Growth in the segment, which has 27 per cent weightage in the country’s total industrial output, was 4 per cent in the first six months of the 2010-11 fiscal, as against 4.5 per cent in the same period last year.

Growth of these industries fell into the negative zone after the global financial crisis hit the country in October 2008. Subsequently, growth picked up again in April last year. However, it fell to its lowest level since then in September 2010. “Now it is sure that IIP will not be in double digits,” Crisil Principal Economist D K Joshi said.

As per industry department data, petroleum refinery production and coal output contracted by 10.2 per cent and 2 per cent, respectively, in September against growth of 3.4 per cent and 6.5 per cent last year.

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