Infra industries see sharp drop in growth

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Hit by supply constraints, infrastructure industries put up a dismal performance in November 2007 - a month that saw growth plummeting to 5.3 per cent from 9.6 per cent a year ago - with crude petroleum becoming the weakest link among the key sectors.

Impacted by sluggish increase in output since September, the cumulative expansion for the April-November period of the current fiscal also declined to 6 per cent as compared to 8.9 per cent in the corresponding months of FY'07.

Crude petroleum, petroleum refinery products, coal, electricity, cement and finished carbon steel form the core infrastructure industries group, accounting for 26.7 per cent weightage in the overall Index of Industrial Production (IIP).

Crude petroleum came out with the worst performance among all these sectors managing a paltry growth of 0.3 per cent in November against a healthy 9.8 per cent in the same month last year. In fact, except coal, growth in all other industries registered a decline during the month.

Petroleum refinery could grow by a mere 5.2 per cent as compared to 16.4 per cent in the year ago period.

"Most of these industries like power and petroleum are hit by supply constraints. However, we should look at the data over the course of the year rather than on monthly basis," India's Chief Statistician Pranab Sen said.

He said it was too early to judge whether the data points to a slowdown in the industrial production.

Electricity generation also dipped to 5.8 per cent from 8.8 per cent, while cement production grew by 4.5 per cent, declining from 11.8 per cent in November 2006. Finished carbon steel registered a growth of 5.8 per cent in November 2007 as compared to 9.3 per cent in the year ago period.

However, coal production grew by 7.7 per cent in November 2007 from 4.9 per cent in the same month of 2006.

For the April-November period of 2007-08, all the six infrastructure industries registered a decline in growth. While crude petroleum grew by a meagre 0.6 per cent during the eight months as compared to 5.4 per cent, growth in petroleum refinery declined to 8.3 per cent from 13.5 per cent in April-November 2006-07.

Coal and Electricity registered a minor decline in growth to 4.3 per cent and 7 per cent from 4.8 per cent and 7.3 per cent respectively.