CHEAPER CRUDE OIL WEAKENS RUPEE EVEN AS CORE SECTOR GROWTH REVIVES
BS Reporter / New Delhi Sep 11, 2008, 00:24 IST
The index of six core-industries grew at its fastest pace in July this fiscal at 4.3 per cent, backed by higher coal production and electricity generation. However, the index number for infrastructure output was much below the 7.2 per cent growth rate in the same month last year, underlining the slowdown in the economy.
The core sector data, released two days before the index of industrial production (IIP) growth data for July, indicate that overall industrial growth in the month may be better than in previous months. The six infrastructure industries constitute around 25 per cent of the IIP.
“It is a poor performance. It will become a constraint on the overall economic growth. Infrastructure has to be supportive,” D K Joshi, principal economist, Crisil, said, adding that the power sector remained a grave concern.
The decline in oil production for the second month in a row is mainly because of ageing oil fields operated by the country’s state-run oil explorer — Oil and Natural Gas Corporation — which produces over 90 per cent of domestic oil.
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