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After Dismal Oct, Infra Growth Bounces Back In Nov

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The economic gloom was lifted somewhat on Monday on news of key infrastructure output bouncing back to 6.8 per cent in November,  brightening propsects for industrial production,  after touching a five-year low of 0.3 per cent in October.

Last month India's industrial output slumped more than 5 per cent in October from a year earlier, far worse than expected and the first drop in more than two years, with capital goods output down 25.5 per cent.

Overall economic growth had slowed to 6.9 per cent in the September quarter, its weakest in two years, and some economists expect India to struggle to reach 7 percent growth in the fiscal year that ends in March 2012. The government had been targeting 9 per cent earlier this year.

Riding on a stellar growth in cement, electricity and refinery products in November 2011, the eight infrastructure sectors which have weightage of 38 per cent in the overall Index of Industrial Production (IIP), considerably improved year-on-year as well from 3.7 per cent in November 2010.

However, due to lagging performance in the previous months, the April-November growth of the core industries stood at 4.6 per cent as against 5.6 per cent in the same period last fiscal,  according to the data released on Monday.

Except for crude oil, natural gas and fertilisers, all other segments registered healthy growth in November.

The maximum growth was witnessed in cement which expanded by 16.6 per cent, while there was a contraction of 4.3 per cent in the same period last fiscal.

Electricity and steel output grew by 14.1 per cent and 5.1 per cent against 3.5 per cent and 7.6 per cent, respectively, in the same month last year.

Coal and petroleum refinery products growth went up by 4.9 per cent and 11.2 per cent in November 2011.

However, crude oil and natural gas output contracted by 5.6 per cent and 10.1 per cent from a positive growth of 17 per cent and 5.5 per cent, year-on-year, respectively.

During April-November, the first eight months of the current 2011-12 financial year, the output rose 4.6 per cent, compared with an annual rise of 5.6 per cent a year ago, data showed.

The infrastructure sector accounts for 37.9 per cent of India's industrial output. Growth was driven by an increase in output of electricity, coal, cement and petroleum refinery  products, the data showed.

Industrial Output Dived In October
India's industrial output declined by 7 per cent in October, dragged down by a fall in the capital goods sector, the first time it moved into negative territory since June 2009.

The industrial sector had been under stress for the past few months, hit by rising interest rates, input costs and stubbornly high inflation.

Industrial growth slowed to a two-year low of 1.9 per cent in September hurt by sluggish manufacturing sector gowth which has been hit by rising interest rates and a decline in mining output.

Eight core industries, which have a combined share of 37.90 per cent in the index of industrial production , grew 0.1 per cent, compared to its growth of 7.2 per cent in October 2010.

Coal, crude oil, natural gas, petroleum refinery products and fertiliser sectors declined in October, while cement output remained flat, it said.
(With agencies)

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