Core sector contracts 2.5% in Feb; worst performance in decades
New Delhi: Dragged down by natural gas and fertilisers sectors, the eight core industries shrank 2.5 percent in February, a worst ever performance in decades, which is likely to result in muted overall factory output numbers.
The core industries -- coal, crude oil, natural gas, petroleum refinery products, fertilisers, steel, cement and electricity -- had grown by 7.7 percent in February, 2012.
"The decline in growth in February, 2013 was on account of negative growth witnessed in electricity generation and in the production of crude oil, coal, natural gas and fertilisers," the Commerce and Industry Ministry said Monday.
The contraction was last seen in these industries in February 2001. The core sector (at that time have six industries only) had contracted by one percent.
During April-February 2012-13, the cumulative growth rate of the sector was 2.6 percent against 5.2 percent during the corresponding period in 2011-12.
These eight industries together account for about 38 percent in the Index of Industrial Production (IIP).
Experts said the worst ever performance of the core sector industries would dampen the overall industrial output (IIP) numbers, which is scheduled to released on April 12.
"The numbers will be a drag on IIP and will pull down the February IIP. It is reflection of the slowdown in the industry. However, this cannot be interpreted as trend," Crisil Chief Economist D K Joshi said.
IIP grew by 2.4 percent in January against one percent in the same month a year ago.
The poor performance of core industries come at a time when government is taking steps to prop up sagging economy, which is estimated to grow at a decade low of 5 percent.
The core sector had grown by 3.1 percent in January and 2.5 percent in the previous month.
Sector-wise performance revealed that the biggest decline was in natural gas segment at over 20 percent in February, followed by coal (-8 percent), electricity (-4.1 percent) and crude oil, fertiliser (-4 percent).
However, cement and steel output rose by 3.9 percent and 0.5 percent respectively in February.