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NEW DELHI: In line with the declining trend in factory output seen during the fourth quarter of last fiscal, the growth rate of core infrastructure industries slowed down to 5.2 per cent in April this year from 7.5 per cent achieved in the same month last year.
The official data on the six core industries — cement, steel, crude oil, petroleum refining, coal and electricity — which together account for a weight of 26.68 per cent in the IIP (Index of Industrial Production) point to a continued deceleration in industrial and overall economic growth during the initial months of the current fiscal owing to inflationary pressures and high cost of credit.
As per the official data released on Tuesday, the country's GDP (gross domestic product) during the January-March period of 2010-11 had witnessed the slowest pace of growth in the last five quarters at 7.8 per cent, mainly owing to high overall inflation which hovered around 8-90 per cent.
The provisional data on the six core industries show that a contraction in cement output coupled with a lower growth in finished steel production during April was mainly responsible for the slowdown in the infrastructure sectors.
While cement production contracted by 1.1 per cent during the month as compared to a healthy 8.8 per cent growth witnessed in April 2010, the output increase in finished steel also slowed down to 4.3 per cent as against a robust expansion of 12.9 per cent notched up during the same month a year ago. Significantly, this marks the lowest growth in finished steel output since July 2010.
Industry watchers point out that the deceleration in production growth has been on expected lines, keeping in view the high cost of credit being made available as part of the inflation-busting measures.
Barring cement and steel, the other four industries, however, performed better. While electricity output went up by 6.8 per cent in April as compared to a growth of 6.9 per cent in the like month last year, crude oil production put up a good show to more than double its growth from 5.1 per cent to 11 per cent in April this year.
Petroleum refinery products also posted a higher growth of 6.6 per cent during the month as compared to an increase of 5.3 per cent in April last year. Coal output, on the other hand, witnessed a complete turnaround by clocking a growth of 2.9 per cent during the month in place of a contraction of 2.9 per cent during the same month a year ago.
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