Journalism of Courage
Growth of the eight key infrastructure industries slowed down to 1.9 per cent in September, lowest in eight months, led by contraction in output of sectors including crude oil, refinery products, natural gas and fertilisers.
The growth in September is against the 5.8 per cent growth witnessed in August and 9 per cent growth seen during the same period last fiscal, data released by the commerce ministry showed.
The core sector, including coal, electricity, steel, cement, refinery products, fertilisers, natural gas, and crude oil, comprises 38 per cent of the Index of Industrial Production (IIP), which inched 0.4 per cent in August. The September figures are due on November 12 and the moderation is likely to have an adverse impact on the numbers. The cumulative core sector growth during the April-September period was 4 per cent as against 5 per cent during the corresponding period a year ago, the data showed.
Experts said that the poor show is largely a function of base effect and going forward the festival season will boost the manufacturing sector.
“Core sector was dampened by the base effect … an earlier onset to the festive season is likely to have provided some boost to various sectors of manufacturing,” Aditi Nayar, senior economist, ICRA, said. However, she added that IIP growth is likely to be subdued in September. The development is also likely to put pressure on the Reserve Bank of India to soften its hawkish stance on interest rates.
Output of crude oil shrank 1.1 per cent against a negative growth of 4.9 per cent in August; natural gas production contracted 6.2 per cent compared to 8.3 per cent last month; refinery products contracted 2.5 per cent compared to 4.3 per cent; while fertiliser output registered a drop of 11.6 per cent as against 4.3 per cent a month ago.
