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BW Businessworld

Core Industries Grow 6.8% In Feb

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Showing signs of recovery, the eight core infrastructure industries grew by 6.8 per cent in February on account of healthy coal and power output, up from a dismal performance of 0.5 per cent a month ago.

The growth by 6.4 per cent in February last year.

The eight industries-- crude oil, petroleum refinery products, natural gas, fertilisers, coal, electricity, cement and finished steel-- have a weight of 37.90 per cent in the overall Index of Industrial Production.

Electricity, coal and cement output grew by 8 per cent, 17.8 per cent and 10.8 per cent, respectively, in February according to the provisional data released Thursday.

Economists said if this growth rate is maintained for a few more months, it would improve the overall industry output.

The eight core sectors had grown by a mere 0.5 per cent in January, 2012.

"We have to see if these numbers hold up in March and April. Then it would be a turnaround in core industries growth," Director and Senior Economist of Deloitte Haskins and Sells Anis Chakravarty said.

"The growth is mainly driven by coal which performed badly last year," CRISIL Economist D K Joshi said.

In February 2011, electricity and cement production had grown by 7.2 per cent and 6.5 per cent respectively, while coal output contracted by (-) 5.8 per cent.

Crude oil production grew by a mere 0.4 per cent in the month under review against 12.2 per cent in the comparable period of last year. Petroleum refinery products output grew by 6.2 per cent against a growth of 3.2 per cent in the same month last year.

However, natural gas output contracted by (-) 7.6 per cent. Fertiliser and steel production rose by 4.1 per cent and 4.3 per cent in February as against 4.8 per cent and 18.5 per cent respectively in the same period last year.