Finished steel, petroleum products fuel growth.
India’s core sector, which is constituted by six key infrastructure industries, grew by 3.5 per cent in October, slowing down from the previous month’s revised growth rate of 4.1 per cent. The core sector grew primarily due to increase in production of finished steel and petroleum refinery products.
The core sector, accounting for 26.7 per cent of the index of industrial production (IIP), had grown at 2 per cent during the corresponding period in 2008. On a sequential basis since August, when the core industries grew by 7.8 per cent, it has been decelerating for 2 consecutive months.
“The index has been rather volatile and might pull down IIP to single digits. However, this does not necessarily point to a significant slowdown in manufacturing,” said Crisil Principal Economist D K Joshi.
Petroleum refinery products grew by 7.2 per cent in October 2009, against 5 per cent last year. Finished steel output and electricity grew by 1.1 per cent and 4.7 per cent, against 4.9 per cent and 4.4 per cent, respectively, in the corresponding month last year.
The growth in the rest of the sectors decelerated on a year-on-year basis. Crude oil production slowed by 2.2 per cent, against 0.2 per cent in 2008. Coal and cement output growth also came down to 5 per cent and 5.3 per cent, from 10.6 per cent and 6.2 per cent, respectively, during the same period in 2008. Growth in all the core infrastructure sectors, except finished steel and petroleum products, decelerated as compared to the growth rates registered in the previous month.
Even as the growth rate has decelerated in October, the cumulative growth rate for the April-October period stood at 4.7 per cent, against 3.3 per cent during the corresponding period in 2008.