Core grows 9.4%, all 6 sectors shine

NEW DELHI: Six core industries that account for more than 26% of the country’s industrial output grew by 9.4% in January, hinting the economy can withstand stimulus rollback, which may be announced in the Union budget today.

The country’s chief statistician, Pronab Sen, who believes that the growth momentum will be maintained despite the rollback in stimulus, told ET, “if the smart growth in core industries gets reflected in industrial output in coming months the estimates of 7.2% growth rate for the current fiscal will have to be revised upward.”

While all the six core industries — crude oil production, petroleum refining, coal production, electricity generation, cement production and finished steel production — clocked high growth in January steel production, the biggest driver of the growth, clocked a 16.2% annual jump.

“There is a gradual recovery taking place in construction and auto industries...in keeping with the improvement in the economic activity, steel production and consumption will continue to show an upward trend,” pointed out a research note by Mumbai-based brokerage house Ambit Capital. The spurt in production of crude oil is expected to be maintained in coming months also with commissioning of new oil wells.

According to the economic survey, Reliance Industries and Cairn India will help India to push up crude oil production by 11% in the next fiscal. Plan panel member Saumitra Chaudhary pointed out that with the growth rate gathering momentum as suggested by recent statistics it is time for a complete rollback of stimulus. “