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Rediff News  All News  » Business » Core sector growth dips to 2.2% in April

Core sector growth dips to 2.2% in April

May 31, 2012 16:38 IST

Showing clear signs of slowdown in the Indian economy, the growth rate of eight core sectors halved to 2.2 per cent in April on account of sharp dip in output of natural gas and fertilisers.

The infrastructure sector had grown 4.2 per cent in the same month last month.

The growth in March too moderated to 2.2 per cent, from 6.5 per cent in the same month last year.

The cumulative growth rate of infrastructure industries in 2011-12 dipped to 4.4 per cent, from 6.6 per cent in 2010-11, according to the data released by the Commerce and Industry Ministry on Thursday.

The eight industries, which also include crude oil, petroleum refinery products, coal, electricity, cement and finished steel - have a weight of 37.9 per cent in the Index of Industrial Production (IIP).

Economist said the poor performance of core industries clearly points to economic slowdown and will have implications for industrial production data to be released on June 12.

"The core sector numbers are very poor. It will effect IIP as well as economy as a whole. The GDP numbers are also down," Crisil Principal Economist D K Joshi said.

Natural gas and crude oil production contracted by 11.3 per cent and 1.3 per cent respectively during April.

Petroleum refinery products and fertiliser production shrunk 2.8 per cent and 9.3 per cent respectively during the month.

Coal, steel and cement output grew by 3.8 per cent, 5.8 per cent and 8.6 per cent in April 2012. In the same month last year, coal output had grown 2.7 per cent, steel - 2.9 per cent and cement - 0.1 per cent.

However, electricity generation slowed down by 4.6 per cent, from 6.4 per cent in April 2011.

Meanwhile, hit hard by global woes and domestic problems, India's economic growth rate slowed to nine-year low, both in the March quarter at 5.3 per cent, as well as for the 2011-12 fiscal at 6.5 per cent, prompting the industry to demand "immediate and bold action" to arrest slowdown.

Fragile economic recovery in the US and Europe and subdued business sentiments at home have affected the growth of the industrial sector.

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