Growth Rate of Eight Core Industries fall in last 1 Year

According to the data released by the Commerce and Industry Ministry on 30 January 2012, the growth rate of eight core industries slowed down to 3.1 per cent in December 2011 from 6.3 per cent in December 2010. These eight sectors had recorded a 6.8 per cent growth in November 2011. The decline in core sector activity was due to a fall in the production of crude oil and natural gas.


The eight core sectors have a combined weight of 37.9 per cent in the Index of Industrial Production (IIP).


The sectors that showed poor performance in December 2011 due to a fall in output include crude oil, natural gas, petroleum refinery products and steel, while those which fared better include coal, fertiliser, cement and electricity.


The growth of these eight sectors during April-December 2011 was 4.4 per cent against 5.7 per cent during the corresponding period in 2010.


Crude Oil


Crude oil production growth contracted by 5.6 per cent in December 2011r, marking a steep fall from a positive 15.8 per cent growth in December 2010. Crude oil production grew only 1.9 per cent during April-December 2011 against 12 per cent during the same period of 2010.


Natural gas


Natural gas production (weight of 1.71 per cent in the index) shrunk to 10.8 per cent in December 2011 compared to a negative growth of 0.2 per cent in December 2010. The sector's growth had contracted to 8.8 per cent during April-December 2011 compared to 17.3 per cent growth during the same period of 2010.

 
Coal production


Coal production (having a weight of 4.38 per cent in the index of industrial production) grew 5.6 per cent in December 2011 against a growth of 3.8 per cent in December 2010. in cumulative terms however coal production grew at a negative (-) 2.7 per cent during April-December 2011-12 compared to its 0.8 per cent growth during the same period of 2010-11.


Crude oil production


Crude oil production (weight of 5.22 per cent) declined 5.6 per cent in December 2011 against a growth of 15.8 per cent in December 2010. Cumulatively production of crude oil was up by a mere 1.9 per cent during April-December 2011-12 against its growth of 12 per cent during the same period of 2010-11.


Petroleum refinery production


Petroleum refinery production (weight of 5.94 per cent) grew at a slow pace of 0.8 per cent in December 2011 against a growth of 8.3 per cent in December 2010. Cumulative production was up 4.1 per cent during April-December 2011-12 against its 1.7 per cent growth during the same period of 2010-11.


Fertiliser production


Fertiliser production (weight of 1.25 per cent) grew at 0.8 per cent in December 2011 against a 0.3 per cent growth in December 2010. Cumulatively production of fertilisers was down 0.5 per cent during April-December 2011-12 against its 1.5 per cent decline during the same period of 2010-11.


Steel production


Steel production (weight of 6.68 per cent) grew 2.2 per cent in December 2011 against its 9.4 per cent growth in December 2010. Cumulatively steel production was 7.5 per cent during April-December 2011-12 against the 8.3 per cent growth recorded in the same period of 2010-11.


Cement production


Cement production (weight of 2.41 per cent) recorded a growth of 13.3 per cent in December 2011 against its (-) 2.2 per cent growth in December 2010, thereby showing an upsurge in construction demand. Cumulative growth of cement production stood at 5.3 per cent during April-December 2011-12 against its 4.4 per cent growth during the same period of 2010-11.


Electricity generation


Electricity generation (weight of 10.32 per cent) grew 8 per cent in December 2011 against its 5 per cent growth in December 2010. Cumulative growth of electricity generation stood at 9.2 per cent during April-December 2011-12 against the 4.7 per cent growth recorded during the same period of 2010-11.