Four sectors drag core growth to 6%

NEW DELHI: Six core infrastructure industries grew at a sharply slower pace in September 2007 compared to the same month last year, raising suspicions of a slowdown in the economy. While petroleum, electricity and cement fared poorly, coal and finished steel recorded impressive growth.

The six industries — crude petroleum, petroleum refinery products, coal, electricity, cement and finished (carbon) steel — which together have 26.7% weight in the key index that gauges industrial production, grew 6% in September 2007 against 10.6% during the corresponding month of the previous year. The segments, which decelerated to 3.8% growth in June, recovered to 6.8% in July and 9.2% in August.

Economists, however, echoed finance minister P Chidambaram’s view that a conclusion on the industry’s performance cannot be taken on the basis of one month’s data. The minister had said on Monday that the economy is expected to grow 9-10% this fiscal.

“The core sector figures are already factored in the industrial production figures released on Monday, which showed a blip. This, however, cannot be considered a trend,” Crisil director and principal economist D K Joshi said. The industrial output figures released on Monday had showed deceleration in growth to 6.4% in September from 12% last year.

The core sector growth for the April-September period of 2007-08 stood at 6.6% against 8.7% in the comparable period of the previous year.Among the six key industries, crude petroleum production put up the worst performance in September 2007 with a negative growth of 0.7% against a 9.4% growth in the year-ago period. Petroleum refinery sector grew 6.9%, around half the last year’s figure of 13.4%.

Electricity generation also showed deceleration with 4.3% growth against 11.5% the previous September while cement recorded only 5% growth compared to 16.5% last year.

However, coal recorded an impressive growth of 6.2% — compared to negative growth the previous September — and finished steel retained the double-digit figure of 10.3%.