Core industry grows at 3.2%; steel production yet to pick up

Deepak Kumar | The Dollar Business

Breaking the trend of stagnation, India’s eight core industries grew at the record rate of 3.2% in September, primarily due to sharp rise in fertiliser production and electricity generation. The eight core industries – cement, coal, crude oil, electricity, fertilisers, natural gas, refinery products and steel – accounting for about 38% of India’s industrial production, had previously grown by 4.4% in May this year. During the first six months of 2015-16, cumulative growth for the core industry remained 2.3%, down from 5.1% during the same period last year. Among the core industries, fertilisers production registered the maximum growth rate in September and reached 18.1% as against 12.59% recorded in August, said the latest government data released on Monday. This growth was significant in the wake of dwindling monsoon season. Electricity generation during September grew by 10.8% as compared to 3.9% in the corresponding month of 2014. The growth registered in this sector was also more than 5.6% recorded during August. The country’s coal output grew at a meager rate of 1.9% during September this year, less than last year’s 7.6% but higher than 0.4% during August 2015, the data showed. Steel production, however, continued to register a negative growth in September, falling by 2.5% as compared to 6.6% during the same month in 2014. “Demand for steel in the domestic market is stagnant. Today the market is really bottom down. The government has been making attempts to focus on infrastructure and real estate sector. It is also considering reduction of interest rates on home loans. All these activities would lead to more domestic demand. Probably the domestic market will pick up in 6-9 months,” C V Raghavan, Director of Finance at Ferro Alloys Corporation Limited (FACOR), told the Dollar Business. Production of other core products, including crude oil and cement also registered a negative growth in September, declining by 0.1% and 1.5% respectively.

November 03, 2015 | 5:52pm IST.