Core industry growth slows to 0.5 per cent

Core industry growth slows to 0.5 per cent

Steel production declines by 2.9%

A dismal output of crude oil and petroleum refinery products pulled down growth in eight key infrastructure industries to a meagre 0.5 per cent from 6.4 per cent a year ago.

The growth of key infrastructure sectors, which showed some improvement in December, 2011 at 3.1 per cent, dipped again to a two-month low figure.

The decline in growth of eight industries — crude oil, petroleum refinery products, natural gas, fertilisers, coal, electricity, cement and finished steel— indicates a slowdown in economy, which has recorded a GDP growth of 6.9 per cent during July-September quarter, lowest in nine quarters.

As per the data released by the Commerce and Industry Ministry, only four segments —  electricity, cement, coal and fertiliser — recorded a positive growth in January 2012, raising concerns for the industry and the government.

The dismal performance of the infrastructure sectors, which have a weight of 37.90 per cent in the overall industrial production, is likely to weigh on the IIP numbers for January, scheduled to be released on March 12. Economist and Ficci Secretary General Rajiv Kumar said the core sector numbers point towards slowdown in the economy.

“The government must focus on strong and structural reform measures to prevent further deterioration,” Kumar said.

The natural gas sector was the worst performer recording a negative growth of 8.9 per cent in January. Petroleum refinery products too showed a decline in production by 4.6 per cent while crude oil were down 2 per cent.

Steel production declined by 2.9 per cent from 8.7 per cent in January 2011.

The decline in growth was also witnessed in the cumulative ten months of the current fiscal with April-January displaying an expansion of 4.1 per cent against 5.7 per cent in the corresponding period last year.