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  • Output of six core industries up 7.1% in Jan, may push up IIP

    Published on March 1, 2011

    The output of the six core infrastructure industries grew by a healthy 7.1 per cent in January, leading some economists to predict a positive impact on overall factory output during the month.

    The growth was mainly driven by the healthy performance of the crude oil, petroleum refinery products and electricity sectors, according to data released by the Industry Ministry on Tuesday.

    The output of the six core industries — crude oil, petroleum refinery products, coal, electricity, cement and finished steel — grew by 9.8 per cent in January, 2010.

    According to economists, the healthy growth in the month under review will have a positive impact on the January Index of Industrial Production (IIP) numbers, which are likely to be released this month.

    “It (the January figures) will have a positive impact on overall January industrial growth,” credit ratings agency CRISIL Principal Economist D K Joshi said.

    Yes Bank Chief Economist Shubhada Rao concurred with this view. “The better core sector numbers would definitely support the IIP in January,” Rao said.

    On the other hand, Ficci Director-General Rajiv Kumar did not see the growth in core sector output having a significant influence on the overall industrial production numbers.

    The core infrastructure industries have a weight of 26.7 per cent in the Index of Industrial Production (IIP).

    Growth in factory output slowed down to a 20-month low of 1.6 per cent in December, 2010.

    During the April-January period of the current fiscal, the six core industries registered a growth of 5.6 per cent, compared to 5.5 per cent expansion in the same period last year.

    Petroleum refinery and crude oil output grew by 8.7 per cent and 10.8 per cent in January from 3.8 per cent and 9.8 per cent, respectively, in the same period last year, as per the data.

    Electricity generation grew by a healthy 9.3 per cent in the month under review, compared to 6.4 per cent expansion in January, 2010, the data said.

    However, coal output contracted by 1.2 per cent in January, 2011, in contrast to 5.4 per cent expansion in the corresponding period last year.

    Growth in cement production slowed to 1.8 per cent in the month under review from 12.4 per cent in January, 2010.

    Growth in finished steel production also slowed to 8.2 per cent in January, 2011, from 16.8 per cent in the comparable period a year ago.

    During the first ten months of this fiscal, the output of the crude oil sector grew by 11.9 per cent, as against a 0.1 per cent contraction in the same period last fiscal.

    Growth in coal output slowed to 0.8 per cent in April-January, 2010-11, from 8 per cent in the corresponding period last year.

    Growth in electricity and cement production also slowed to 5 per cent and 4.1 per cent, respectively, during the first ten months of the ongoing financial year from 5.9 per cent and 11.1 per cent in the same period last year.

    The data further showed that petroleum refinery output expanded by 2.4 per cent during the period — as against a 0.5 per cent contraction in April-January, 2009-10, while finished steel production rose by 7.8 per cent, compared to 5.7 per cent growth in the corresponding period of the previous year.