The New Year ushered in some good news on the economic front with the growth rate of the eight core sectors accelerating to a 13-month high of 6.8 per cent in November 2017, on the back of a strong performance in the refinery, steel and cement segments, official data released on Monday showed. The eight infrastructure sectors -- coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity -- had recorded a growth of 3.2 per cent in November 2016.
The output of refinery products, steel and cement rose by 8.2 per cent, 16.6 per cent and 17.3 per cent, respectively on an annual basis, according to the data released by the commerce and industry ministry. A robust growth in the key infrastructure sectors has positive implications for the Index of Industrial Production (IIP) as these eight segments account for about 41 per cent of the total factory output.
Crude oil and natural gas output, too, showed a positive growth during November. The crude oil and gas production figures also came along with the positive news that ONGC has made a significant oil and gas discovery to the west of its prime Mumbai High fields in the Arabian Sea. Details of the strike were stated in a written reply by Oil Minister Dharmendra Pradhan to a question in the Lok Sabha. He said the discovery was made in the well WO-24-3 (WO-24-C) drilled west of Mumbai High fields.
The discovery has indicated potential in-place reserves of about 29.74 million tonnes of oil and oil equivalent gas, he said. However, coal output during November recorded a negative growth.Cumulatively, the growth in the eight core sectors during April-November this fiscal slowed to 3.9 per cent as against 5.3 per cent in the same period last fiscal.
ICRA economist Aditi Nayar said the early indicators for industrial production in the organised sectors in November 2017 provide favourable signals, such as the uptick in growth of the core sector and sharp improvement in the expansion of automobile production and non-oil merchandise exports.
"We expect the growth of the Index of Industrial Production (IIP) to rebound to a healthy 5-6% in November 2017,'' she said. The favourable base effect related to the temporary slowdown in activity after demonetisation, is likely to boost volume growth in a variety of sectors in the remainder of 2017-18, she pointed out.