Core sector growth slows to 21-month low in November

Core sector growth slows to 21-month low in November

In October, these sectors had recorded an impressive growth of 8.6 per cent.

The lacklustre growth of the 6 infrastructure sectors, which have a weightage of 26.68 per cent in the overall industrial output, was largely on account of dip in petroleum refinery and cement output.

The core sectors--crude oil, petroleum refinery products, coal, electricity, cement and finished steel -- had expanded by 5.9 per cent in November 2009.

Petroleum refinery output contracted by 3.7 per cent and that of cement by 11.6 per cent in November, according to the official data released today. The refinery production had expanded 4.8 per cent and cement by 9 per cent in November of 2009.

Coal production witnessed a sluggish growth of 0.7 per cent this November, against 4.7 per cent in the same month last year.

Growth in the finished steel sector too was slow. It expanded by 4.4 per cent last month, as compared to 11.7 per cent in November 2009.

However, crude oil production witnessed a significant jump as it expanded by 17 per cent in the penultimate month of 2010. The sector had contracted by 1.6 per cent in November 2009, the data said.

Economists said the slower pace of growth in different sectors would impact Index of Industrial Production (IIP) badly.

"The contraction in cement is a surprise...the contraction in core sector growth will adversely impact IIP growth. It may come down to single digits," Crisil Principal Economist D K Joshi said.

Core sector growth in November was slowest since February 2008-09, when it had slowed to 1.9 per cent.

India's industrial output grew by double digit of 10.8 per cent in October. IIP Data for November is expected on January 12.

During the April-November period of the current fiscal, crude oil, petroleum refinery products and cement production have registered a growth of 11.5 per cent, 0.8 per cent and 4.1 per cent, respectively.

Growth in crude oil and refinery products output had contracted to 1.4 per cent and 1.2 per cent respectively in the same period last year, though cement output was up by 11 per cent during April-November 2009-10.

As per the data, growth in coal output during the first eight months of the fiscal slowed to 0.6 per cent, from 9.7 per cent in the year-ago period. Similarly, growth in electricity generation slowed to 4.5 per cent from 5.8 per cent in April-November 2009-10.

However, finished steel output growth was higher at 6.9 per cent during the period under review, as against 2.9 per cent in the corresponding period last year.

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