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| Core sector growth in September dips to 4% |
| BS Reporter / New Delhi Oct 29, 2009, 00:54 IST |
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Core sector growth dropped to 4 per cent in September, primarily due to lower coal production, after showing an impressive expansion of 7.8 per cent in August. Analysts predict that the industrial output for September is not likely to be in double digits, since core sector growth has dipped.
The six core sectors — cement, coal, steel, electricity, crude petroleum and petro-refinery products — constitute 26.7 per cent of the Index of Industrial Production (IIP).
The coal and cement sectors, which had led the chart in August, showing 12.9 per cent and 17.6 per cent growth, respectively, slipped to 6.5 per cent each in September, according to the official data released today.
The data came in the midst of other indicators signalling a revival in the economy. On a year-on-year basis, the growth of the six core sectors remained unchanged at 4 per cent. In cumulative terms, the growth for infrastructure industries in the first half of the current financial year improved to 5 per cent, against 3.4 per cent in the corresponding period in 2008-09.
“The industrial output for the month of September will not be in double digits and will come down from the level of 10.4 per cent (registered in August). The index for the core sector is highly volatile but if you look at the average trend, it is actually going up. A lot of the fluctuations depend on what is happening in the individual sectors,” said D K Joshi, principal economist with ratings firm Crisil.
The IIP figures for September are scheduled to be released on November 12. IIP has been showing better growth than the core sector on the back of high growth witnessed in automobiles and consumer durables.
Barring crude oil production and petroleum refinery products, the remaining core sectors registered a drop in production in September over the previous month. Crude oil continued to show a decline of 1 basis point over September 2008.
Coal registered a significant drop of 4.7 percentage points to 6.5 per cent over September 2008.
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