India's core sector grows by 8% in Sept, highest in 11 months

Reflecting pick up in industrial activity, the core sector industries recorded 8 per cent growth in September, highest in the past 11 months. 

The eight infrastructure industries grew mainly due to expansion in crude oil, steel and electricity production.

The growth rate of the core industries is higher than the previous month, August 2013, when these sectors grew by 3.7 per cent. However, it is lower than 8.3 per cent that was recorded a year ago in September 2012.

The core industries, which also include coal, natural gas, petroleum refinery products, fertiliser and cement with a weight of about 38 per cent in the Index of Industrial

Production (IIP), have grown at 3.2 per cent during the April-September period of this fiscal, 2013-14, compared to 6.6 per cent in the first six months of 2012-13.

Crude oil, steel and electricity output grew by 0.6 per cent, 6.6 per cent and 12.6 per cent respectively during September, according to the official data released on Thursday.

Experts said though the growth rate in September is high, there is a need to carefully watch the coming 2-3 months.

"One should not be in a hurry to say that this figure is reflecting revival. If the similar trend will continue for another 2-3 months then we can say. But it will have a positive impact on IIP numbers for September," CRISIL Principal Economist D K Joshi said.

The IIP numbers for September are likely to be announced on November 12. Factory output slowed down sharply to 0.6 per cent in August mainly on account of contraction in manufacturing and mining.

Coal production growth rate slowed to 12.5 per cent, while natural gas output dipped (-) 14.1 per cent. 

Growth in petroleum refinery products declined to 8 per cent in September, as against 34.9 per cent in the same period previous year. Fertiliser and cement production growth also slowed to 5.3 per cent and 11.5 per cent.

For the April-September period, crude oil production has declined by (-) 1.3 per cent as compared to a contraction of (-) 0.8 per cent. Similarly the output of natural gas in

the six month period contracted by (-) 16.5 per cent as compared to decline in production by (-) 12.5 per cent in the same period last year.

Petroleum refinery production expanded by 5.3 per cent during the period, as against 27 per cent in April-September 2012. During the first half of this fiscal, cement output too

slowed down to 4.5 per cent compared to 9.1 per cent.

The production of coal also slowed down to 2.3 per cent as compared to 9.4 per cent. During April-September, however, fertiliser production grew by 2.5 per cent compared to (-) 5.6 per cent in the same period last fiscal.

Steel and electricity generation grew by 4.5 per cent and 5.4 per cent respectively during the period.