Core sector growth up to 9.9%

Production in the six core infrastructure industries during September increased to 9.9 per cent, compared with 6.3 per cent in the same period last year.

The growth is mainly on account of a turnaround in the crude petroleum and electricity sectors, notwithstanding a slowdown in the production of coal and finished steel.

The increase in production during the April-September period was 7.3 per cent, as against 6.1 per cent in the same period a year ago, again despite a slowdown in production of coal, cement and steel products.

The six core infrastructure industries have a combined weight of 26.7 per cent in the index of industrial production.

According to Saumitra Choudhari, chief economist, ICRA, the growth rates for the six core infrastructure industries was in line with expected trends since the recovery in production of crude petroleum and petroleum refinery products was mainly due to the recovery in ONGC's output after the fire in Mumbai High last year.

"While the cement output growth has not been very strong, the decline in coal production could be due to rationalisation of demand and also heavy rains in the coal producing belts of the eastern regions at the fag end of the monsoon," he said, adding that there could be some cause for concern if coal production did not pick up in the remaining months.

Crude petroleum production grew by 9.3 per cent in September from a decline of 7.4 per cent in September 2005. Similarly, electricity production increased by 11.5 per cent from a negative 0.7 per cent in September 2005.

Sectors like coal and finished steel reported a slowdown in production. The production of coal dipped from growth of 4.3 per cent in September 2005 to a negative 0.6 per cent in September this year.

Growth in production of finished steel (carbon) slowed down to 8.4 per cent in September 2006 from 23.3 per cent in September 2005.

Petroleum refinery products registered a growth rate of 13.5 per cent in the month, compared with 4.9 per cent in September 2005. Cement production also grew 15.9 per cent in September 2006, against 4.9 per cent in the same month last year.

During the April-September period, sharp growth of 4.1 per cent was witnessed in production of crude petroleum, against a decline of 5 per cent in the corresponding period last year.

Production of petroleum refinery products also witnessed a turnaround, growing by 12.3 per cent, against a decline of 0.7 per cent in April-September 2005-06.