The growth rate of eight core sector industries halved to 2.2 per cent in April, indicating that there is no immediate respite in sight for the slowing economy as it enters the new financial year, official numbers released on Thursday show.
The infrastructure sector had grown 4.2 per cent in the same month last year. The growth in March, too, moderated to 2.2 per cent, from 6.5 per cent in the same month last year.
The cumulative growth rate of infrastructure industries in 2011-12 dipped to 4.4 per cent, from 6.6 per cent in 2010-11, according to the data released by the commerce and industry ministry on Thursday.
PERSPECTIVE:GDP growth slowest in 9 years
The eight industries, which include coal, electricity, cement, steel, crude oil and petroleum refinery products, have a weight of 37.9 per cent in the index of industrial production (IIP).
Economists said the poor performance of core industries clearly points to an economic slowdown and will have adverse impact on industrial production data to be released on June 12.
"The core sector numbers are very poor. It will affect IIP as well as economy as a whole. The GDP numbers are also down," Crisil principal economist D. K. Joshi said.
The production of natural gas and crude oil contracted by 11.3 per cent and 1.3 per cent respectively, during April.
Petroleum refinery products and fertilizer production shrank 2.8 per cent and 9.3 per cent, respectively, during the month.
Coal, steel and cement output grew by 3.8 per cent, 5.8 per cent and 8.6 per cent, respectively, in April 2012. In the same month last year, coal output had grown 2.7 per cent, steel 2.9 per cent and cement by 0.1 per cent.
The higher steel and cement output is an indicator that there has been some pick-up in construction activity.
However, electricity generation slowed down by 4.6 per cent, from 6.4 per cent in April 2011.
This is a worrying sign as any shortage in power sector tends to hit agricultural production as well as industrial output, which eventually pulls down the economic growth rate.
Courtesy: Mail Today