Low base pushes up infra growth to 5.3%
The Financial Express, December 25, 2009, Page 2
fe Bureaus, New Delhi
The index of six core infrastructure industries expanded 5.3% in November, the most in three months, due to a weak base in the corresponding period in the year ago month. Though a record rise in steel output boosted the numbers, the real support came from the cement sector where strong production growth was witnessed during month under consideration.
November’s core sector performance was way above the meager 0.8% growth recorded in the same month last year, and an improvement on the 3.8% growth seen in October. In the eight months of April to November 2009, the core infrastructure sector grew 4.6% as against 3.5% in the corresponding period last year.
“The numbers indicate that while construction sector is doing well, other basic infrastructure sectors are lagging. Overall, it seems that the symptoms of sustained growth in the core sector has not sustained. We have to be careful while talking about recovery of the economy. Probably, there are some doubts that are still there and a full recovery may be prolonged,” said D K Srivastava, Director, Madras School of Economics.
With the base effect playing a large role in the November numbers, the Index of Industrial Production during the same month may not see the robust growth that it witnessed in the past couple of months. The core sector comprises 27% of the IIP.
Finished (Carbon) steel output stood at 4,6,38,000 tonne, an annual rise of 11.7% in November. Though this is the highest increase in 25 months, it came on the back of a 6.3% contraction in same month of the previous year. Steel is a key input in the construction industry and off late its demand has been driven by the infrastructure sector as real estate activity remained weak.
Cement production in the month stood at 1,61,80,000 tonne, an increase of 9% during the month. However, out put from the sector has been waning after August, when it peaked at 17.6%. Cement is another key input in the construction sector. In the months between February to August this year, the sector grew in the range of 11.8 to 17.6% as the stimulus packages announced by the government boosted infrastructure activity.
Output from power plants increased only 1.8% during November, the least in nine months. As thermal plants produced lesser electricity compared to the previous year, coal mines output also remained weak at 3.3%. Nearly 80% of the coal output is used by thermal power plants. Recently, a Parliamentary Consultative Committee had pulled up the coal ministry arguing of the 208 captive coal mine blocks it awarded, many of which went to power and steel plants, only 25 have become operational. The country is expected to import 70 million tones of coal to meet domestic requiremet.
The Financial Express, December 25, 2009, Page 2
fe Bureaus, New Delhi
The index of six core infrastructure industries expanded 5.3% in November, the most in three months, due to a weak base in the corresponding period in the year ago month. Though a record rise in steel output boosted the numbers, the real support came from the cement sector where strong production growth was witnessed during month under consideration.
November’s core sector performance was way above the meager 0.8% growth recorded in the same month last year, and an improvement on the 3.8% growth seen in October. In the eight months of April to November 2009, the core infrastructure sector grew 4.6% as against 3.5% in the corresponding period last year.
“The numbers indicate that while construction sector is doing well, other basic infrastructure sectors are lagging. Overall, it seems that the symptoms of sustained growth in the core sector has not sustained. We have to be careful while talking about recovery of the economy. Probably, there are some doubts that are still there and a full recovery may be prolonged,” said D K Srivastava, Director, Madras School of Economics.
With the base effect playing a large role in the November numbers, the Index of Industrial Production during the same month may not see the robust growth that it witnessed in the past couple of months. The core sector comprises 27% of the IIP.
Finished (Carbon) steel output stood at 4,6,38,000 tonne, an annual rise of 11.7% in November. Though this is the highest increase in 25 months, it came on the back of a 6.3% contraction in same month of the previous year. Steel is a key input in the construction industry and off late its demand has been driven by the infrastructure sector as real estate activity remained weak.
Cement production in the month stood at 1,61,80,000 tonne, an increase of 9% during the month. However, out put from the sector has been waning after August, when it peaked at 17.6%. Cement is another key input in the construction sector. In the months between February to August this year, the sector grew in the range of 11.8 to 17.6% as the stimulus packages announced by the government boosted infrastructure activity.
Output from power plants increased only 1.8% during November, the least in nine months. As thermal plants produced lesser electricity compared to the previous year, coal mines output also remained weak at 3.3%. Nearly 80% of the coal output is used by thermal power plants. Recently, a Parliamentary Consultative Committee had pulled up the coal ministry arguing of the 208 captive coal mine blocks it awarded, many of which went to power and steel plants, only 25 have become operational. The country is expected to import 70 million tones of coal to meet domestic requiremet.
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