Core sector growth halves to 2.2 percent in April

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

The infrastructure sector had grown 4.2 percent in the same month last year. The growth in March too moderated to 2.2 percent, from 6.5 percent in the same month last year.

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

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

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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% and 1.3% respectively during April.

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

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

However, electricity generation slowed down by 4.6%, from 6.4% 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%, as well as for the 2011-12 fiscal at 6.5%, 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.

PTI