Core growth tumbles to 2.3% in Aug

NEW DELHI: Core infrastructure industries logged a sluggish growth of 2.3% in August 2008 compared to 9.5% in the corresponding month of the previous year. Electricity generation was the worst performer among the six sectors, according to government data released here on Friday. The sector posted an abysmal growth of 0.8% in August 2008 against 9.2% in August 2007.

Crude oil was the other poor performer, logging a growth of 1% in August this year against 6.5% in August 2007. The growth of this sector was negative during April-August 2008.

However, coal production was a tad better, with a growth of 5.9% in August 2008 against 8% in August 2007. Cement also grew at a sluggish pace of 1.9% in August 2008 compared to 16.9% in the corresponding month of the previous fiscal. The provisional growth in steel was also sluggish at 4.4% in August 2008 compared to 9.6% last August.

In the case of petroleum refinery, production growth during August 2008 was 2.5%, sharply lower than the 8.2% recorded in August 2007.

For the April-August period also, the six core sectors comprising crude oil, petroleum refinery products, coal, electricity, cement and finished steel showed a slower growth of 3.4% as against 7.1% in the corresponding period of the last financial year.

Experts feel the performance of core sector needs to be watched since exports are doing well, credit growth rate is robust and domestic consumption is showing no sign of let-up.

���The infrastructure industries have not been faring well for the last five or six months. But more and more investments are happening in these sectors even now. I don���t see any improvement in growth rate in this sector in immediate future. We have to wait and see how the scenario is going to pan out,��� Crisil principal economist D K Joshi said.