Core grows mere 4%, may pull down IIP
The Economic Times, October 29, 2009, Page 9
Just Petro Refinery Products & Crude Oil Segments Show Yr-On-Yr Rise In Sept
Our Bureau NEW DELHI
THE industrial output growth, as measured by the Index of Industrial Production (IIP), may see a drop in September from the 10.4% growth registered in August as the index of core sector industries, which has a weightage of 26.7%, clocked a 4% growth in September, sharply lower than the 7.8% in the month before.
None of the six core industries captured by the index — crude oil, petroleum refinery products, coal, electricity, cement and finished steel (carbon) — showed a month-on-month uptick in production.
Crude oil and petroleum refinery products were the only two segments that showed a higher annual growth rate in September. Analysts are expecting the growth rate in these two segments to gather momentum as the output from Reliance’s KG basin and Cairn’s oilfield in Rajasthan stabilise. Policymakers pointed that this would have an impact on electricity generation as well.
Planning commission member Saumitra Chaudhari told ET: “The gas output from oil fields, which started production recently, will help in keeping the electricity generation high.” He added this was one of the reasons why the electricity generation was relatively high inspite of reservoir levels being low on account of truant monsoon. With the late revival of monsoon, the reservoirs are also recharged, especially in south.
A recent note by Citi economist Rohini Malkani points out that the strong coal production in first half of the year may be due to higher cement production, as coal is an input and a source of power in cement production.
“The delayed monsoon has helped the construction industry and will lead to better yearon-year growth in cement and steel,” Mr Chaudhari pointed out.
On a cumulative basis, the core sector index was up 4.8% during first six months of the year, outpacing the 3.4% growth seen during the same period last year. Growth in coal and cement in the first six months of the current fiscal outperformed growth in same period last year.
The Economic Times, October 29, 2009, Page 9
Just Petro Refinery Products & Crude Oil Segments Show Yr-On-Yr Rise In Sept
Our Bureau NEW DELHI
THE industrial output growth, as measured by the Index of Industrial Production (IIP), may see a drop in September from the 10.4% growth registered in August as the index of core sector industries, which has a weightage of 26.7%, clocked a 4% growth in September, sharply lower than the 7.8% in the month before.
None of the six core industries captured by the index — crude oil, petroleum refinery products, coal, electricity, cement and finished steel (carbon) — showed a month-on-month uptick in production.
Crude oil and petroleum refinery products were the only two segments that showed a higher annual growth rate in September. Analysts are expecting the growth rate in these two segments to gather momentum as the output from Reliance’s KG basin and Cairn’s oilfield in Rajasthan stabilise. Policymakers pointed that this would have an impact on electricity generation as well.
Planning commission member Saumitra Chaudhari told ET: “The gas output from oil fields, which started production recently, will help in keeping the electricity generation high.” He added this was one of the reasons why the electricity generation was relatively high inspite of reservoir levels being low on account of truant monsoon. With the late revival of monsoon, the reservoirs are also recharged, especially in south.
A recent note by Citi economist Rohini Malkani points out that the strong coal production in first half of the year may be due to higher cement production, as coal is an input and a source of power in cement production.
“The delayed monsoon has helped the construction industry and will lead to better yearon-year growth in cement and steel,” Mr Chaudhari pointed out.
On a cumulative basis, the core sector index was up 4.8% during first six months of the year, outpacing the 3.4% growth seen during the same period last year. Growth in coal and cement in the first six months of the current fiscal outperformed growth in same period last year.
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