Oct 29, 2009

Infra growth slips

New Delhi, Oct. 28: After showing a healthy expansion of 7.1 per cent in August, the growth in the core infrastructure sector dropped to four per cent in September, making analysts wonder whether the robust industrial recovery can be sustained.
Coal and cement which had led the chart in August by showing an impressive growth of 12.9 per cent and 17.6 per cent respectively, slipped to 6.5 per cent each in September, according to the official data released on Wednesday.
On year-on-year basis, the September growth this fiscal of the six sectors - cement, coal, steel, electricity, crude, oil and petroleum refinery products — remained unchanged at four per cent.
The index of the core industries, which account for a quarter of the nation’s industrial production, had helped the factory output reach a robust 10.4 per cent growth in August.
With infrastructure growth slipping again, it is a matter of debate if the August performance of the total industrial production can be repeated in September. “I can say that the IIP for September will not be in a double digit,” CRISIL Principal economist, Mr D.K. Joshi said.
However, growth for the infrastructure industries for the first half of the current fiscal improved to five per cent from 3.4 per cent in April-September 2008-09.
“The figures reflect that investment and consumer demand is not growing,” ICRIER (Indian Council for Research on International Economic Relations) director, Mr Rajiv Kumar said.
The electricity generation grew by 7.5 per cent in September against 4.4 per cent in the same month last year, while the petroleum refinery products output expanded by 3.4 per cent in the month against 2.8 per cent in September 2008.
Finished steel production declined by 0.4 per cent against 2.1 per cent in September 2008. Crude oil remained in the negative zone with a 0.5 per cent decline in September 2009, compared to 0.4 per cent.
In the first quarter of 2009-10, coal and cement production grew by a healthy 11.6 per cent and 12.3 per cent each against eight per cent and 5.5 per cent respectively in April-September 2008-09.
Electricity generation during April-September 2009-10 grew by 6.8 per cent from 2.6 per cent in the same period last year.
However, finished steel production declined by three per cent from 3.3 per cent.
Petroleum refinery products slipped to (-) 3.6 per cent from a positive 4.5 per cent in the first six months of the last fiscal.
Crude oil during production during April- September was in the negative zone of 1.2 per cent, compared to 0.8 per cent in the corresponding period last year.

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