Core Sector Growth Slips to 2 Percent in Mar; 4.3 Percent in FY12

Bangalore: Reflecting a slowdown in the economy, the growth rate of eight core infrastructure sectors dipped to 2 percent in March and 4.3 percent during 2011-12 on account of poor performance in crude oil and natural gas. The growth rate of eight industries - crude oil, petroleum refinery products, natural gas, fertilisers, coal, electricity, cement and finished steel - have a weightage of 37.9 percent in the Index of Industrial Production (IIP), in March moderated to 2 percent from 6.5 percent in the same month last year. The cumulative growth rate of infrastructure industries during fiscal 2010-11 slowed down to 4.3 percent, down from 6.6 percent in 2010-11. The dismal performance of core industries, according to experts, points to economic slowdown and will have implications for industrial production data to be released on May 12. "Of-course, it will affect. Not only now, it will also affect IIP in the next year due to lagged effect. It's an ongoing problem. What we need is policy attention," FICCI Secretary General Rajiv Kumar said. The data, he added, "reaffirms the worst fears and the economy is in a midst of a real slowdown. The government needs to take several steps." As per the data released by the government natural gas and crude oil contracted by 10.1 percent and 2.9 percent respectively. Steel, electricity and fertiliser output slowed down by 2.3 percent, 2.1 percent and 1.5 perecnt, respectively in the month under review compared to 12 percent, 7.6 percent and 3.9 percent, respectively a year ago.