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January core sector growth slows to 1.8%

India’s infrastructure sectors like coal, electricity cement and steel are all slowing down according to the January core sector data. Growth in eigh core industries slowed to 1.8 percent, lowest in thirteen months, due to negative expansion in crude oil and natural gas.

Following is the industrywise chart:                          

Growth        JAN (%)     APR2014-JAN2015 (%)

COAL             1.7           8.1

CRUDE         -2.3          -1

NAT GAS     -6.6         -5.2

REF PDTS     4.7          0.1

FERT              7.1           -0.5

STEEL             1.6          1.6

CEMENT       0.5           7.1 

ELEC               2.7            8.9

OVERALL      1.8            4.1

The core sectgor number for the month of October and November was 6.7 percent and 6.3 respectively but for the month of December had slowed to 2.4 percent because of big base in the month of December.

The eight core sector industries — coal, crude oil, natural gas, refinery products, fertiliser, steel, cement and electricity — had expanded by 3.7 percent in January, 2014.

The core sector contributes 38 percent to the overall industrial production, a parameter that RBI takes into account while framing its monetary policy.

The crude oil production was down by 2.3 percent and natural gas production contracted 6.6 percent. However, output in steel, cement and electricity registered growth during the month under review, but the expansion is lower as compared to that in January 2014.

However, coal and refinery products output grew by 1.7 percent and 4.7 percent respectively against 1.2 percent and contraction of 4.2 per cent in the year ago period.

During April-January period, the eight sectors grew by 4.1 percent as against 4 percent in the same period of the previous fiscal.

After looking at January core sector data, as well as the February PMI data which again saw a fall, it looks like there is a continuing weakness in the Indian economy.

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