September core sector growth highest in 11 mths

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SME Times News Bureau | 01 Nov, 2013
Core sector grows by 8 percent in September, which is highest in the past 11 months, government data showed Thursday.

According to data released, the eight infrastructure industries grew mainly due to expansion in crude oil, steel and electricity production.

The growth rate of the core industries is higher than the previous month, August 2013, when these sectors grew by 3.7 percent. However, it is lower than 8.3 percent that was recorded a year ago in September 2012.

The core industries, which also include coal, natural gas, petroleum refinery products, fertiliser and cement with a weight of about 38 percent in the Index of Industrial Production (IIP), have grown at 3.2 percent during the April-September period of this fiscal, 2013-14, compared to 6.6 percent in the first six months of 2012-13.

Crude oil, steel and electricity output grew by 0.6 percent, 6.6 percent and 12.6 percent respectively during September, according to the official data released in New Delhi on Thursday.

Experts said though the growth rate in September is high, there is a need to carefully watch the coming 2-3 months.

"One should not be in a hurry to say that this figure is reflecting revival. If the similar trend will continue for another 2-3 months then we can say. But it will have a positive impact on IIP numbers for September," CRISIL Principal Economist D K Joshi said.

The IIP numbers for September are likely to be announced on November 12. Factory output slowed down sharply to 0.6 percent in August mainly on account of contraction in manufacturing and mining.

Coal production growth rate slowed to 12.5 percent, while natural gas output dipped (-) 14.1 percent.

Growth in petroleum refinery products declined to 8 percent in September, as against 34.9 percent in the same period previous year. Fertiliser and cement production growth also slowed to 5.3 percent and 11.5 percent.

For the April-September period, crude oil production has declined by (-) 1.3 percent as compared to a contraction of (-) 0.8 percent.

Similarly the output of natural gas in the six month period contracted by (-) 16.5 percent as compared to decline in production by (-) 12.5 percent in the same period last year.

Petroleum refinery production expanded by 5.3 percent during the period, as against 27 percent in April-September 2012.

During the first half of this fiscal, cement output too slowed down to 4.5 percent compared to 9.1 percent.

The production of coal also slowed down to 2.3 percent as compared to 9.4 percent.

During April-September, however, fertiliser production grew by 2.5 percent compared to (-) 5.6 percent in the same period last fiscal.

Steel and electricity generation grew by 4.5 percent and 5.4 percent respectively during the period.