Growth in key infrastructure sectors fell to a 21-month low of 2.3% in November from a year ago as output growth in petroleum refining and cement dipped. These six infrastructure industries had however posted an impressive growth of 8.6% in October.
Poor growth in infrastructure, which has a weightage of 26.68% in the overall industrial output, imparted an element of uncertainty to the forecasts of GDP growth in the second half of the financial year.
The core sectors ? crude oil, petroleum refinery products, coal, electricity, cement and finished steel ? had expanded by 5.9% in November 2009.
Petroleum refinery output contracted by 3.7% and that of cement by 11.6% in November, official data released Thursday said. Refinery production had expanded 4.8% and cement by 9% in November of 2009. Coal production witnessed sluggish growth of 0.7% this November, against 4.7 % in the same month last year.
Suresh Tendulkar, former chairman of Prime Minister?s Economic Advisory Council, said there are supply constraints in the case of cement, while exports in petroleum products may have dipped. ?The situation, however, may not impact the growth of the economy that is pegged at 8.75%,? Tendulkar said. Growth in the finished steel sector too was slow. It expanded by 4.4% in November, as compared to 11.7 % in November 2009. However, crude oil production witnessed a significant jump, expanding 17% in November 2010. The sector had contracted by 1.6 % in November 2009. ?The contraction in cement is a surprise…the contraction in core sector growth will adversely impact IIP growth. It may come down to single digit,? Crisil principal economist DK Joshi said. Core sector growth in November was slowest since February 2008-09, when it had slowed to 1.9%. India?s industrial output grew 10.8 % in October. IIP data for November is expected on January 12.
