Eight core industries that have a combined weight of 37.90 percent in the index of industrial production (IIP) logged a negative 0.1 percent growth year-on-year in November 2012. In the corresponding month of 2011, these industries had registered a growth of 6 percent.
The eight core industries are coal, crude oil, natural gas, petroleum refinery products, fertilizers, steel, cement and electricity. These had logged a 8.2 percent growth in October, led by a rebound in manufacturing, power and higher output of capital as well as consumer goods.
The cumulative growth of the core industries during April-November 2012-13 was 1 percent as compared to 3.8 percent growth registered during the corresponding period of the previous fiscal, according to data released by the commerce and industry ministry.
The contraction in industrial output is expected to have a bearing on the Reserve Bank of India (RBI), which is to decide upon key lending rates later this month.
The RBI had kept key policy rates unchanged in its Dec 18, 2012, meeting, but had hinted at cutting rates in January, saying the focus of the monetary policy would now shift to spurring growth as inflationary pressures are easing.
India's central bank has kept repo rate, the rate at which it lends to commercial banks, unchanged at 8 percent. Reverse repo rate, interest rates the central bank pays to commercial banks on their money kept, also remained unchanged at 7 percent.
Many sectors that depend on consumer finance to boost sales, especially the automobile and realty sectors, are keenly awaiting a rate cut. The contraction in output may become a point in that direction. However, inflation data for December is expected soon.
The November data had showed a decline to a 10-month low of 7.24 percent against 7.45 percent.
But the wholesale price-based food inflation increased to 8.50 percent in November from 8.32 percent recorded in the corresponding month of 2011, thus remaining a major concern for the RBI.
The manufacturing sector's output in November marginally increased by 0.3 percent during the month under review as compared to 6.6 percent registered during the corresponding month of 2011.
The cumulative figures about the manufacturing industry showed an increase of 1 percent in April-November 2012, as compared to 4.2 percent growth registered in the same period last fiscal.
The mining sector registered a negative growth. The sector, which has 10.32 percent weight in the IIP, registered a decline of 5.5 percent in November this year as compared to 3.5 percent decline in the corresponding month of the previous year.
The electricity sector, however, grew by only 2.4 percent compared to 14.6 percent increase during the year-ago period.
Segment-wise, high negative growth was reported in newspapers (-22.7 percent), furnace oil (-28.00 percent), PVC pipes and tubes (-33.1 percent), grinding wheels (-43.7 percent), air conditioners (-36.6 percent), tractors (-20.5 percent), drilling equipment (-57.7 percent), plastic machinery (-40.4 percent) and commercial vehicles (-28.3 percent).
Growth in segment-wise was witnessed in rice (21.3 percent), cotton yarn (21.9 percent), antibiotics (28.4 percent), carbon steel (18.8 percent), stainless/ alloy steel (19.7 percent) and telephone instruments including mobile phones and accessories (18.1 percent).
