Core growth slows to 3.5% in Oct

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New Delhi: The index of six core infrastructure industries expanded 3.5% in October, the least in the past three months, as growth in output from coal mines, power plants and cement factories remained weak.

The latest numbers are an improvement over the 2% increase in the corresponding month last year, but less than the 4.1% growth seen in September. The core sector comprises nearly 27% of the Index of Industrial Production.

In the seven months ended October, the core infrastructure sector grew 4.7%, against 3.3% in the corresponding period last year. “The core sector data shows that demand and consumption within the economy is strong,” said commerce minister Anand Sharma.

Cement production in October expanded 4.7%, the lowest in 13 months and stood at 16,070 thousand tonne.

The sector is an indicator of activity in the infrastructure and housing sectors. Cement production was seen increasing at a double digit pace between March and August this year as government pumped in money for infrastructure creation.

Coal production also remained weak compared to the previous months as output from mines grew 5%, the lowest in more than three years. In the period between April and October of this fiscal, coal production in the country stood at 274.13 million tonne.

Nearly 80% of the coal produced in the country is consumed by thermal power plants. The planning commission has estimated that during 2009-10, the country will have to import 70 million tones of coal to meet domestic requirement.

During October, output from power plants increased at a three-month low rate of 4.7%, data showed. Moreover, finished steel output expanded 1.1% from a year earlier and stood at 4,521 thousand tones.