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Infra Sector Growth Slows to 5-Yr Low in October

  • Led by decline in output of coal, the eight key infrastructure industries registered a dismal growth of 0.1% in October, the lowest in last five years.
  • The sector had recorded a growth of 7.2% in October 2010. The decline in growth of eight industries, such as crude oil, petroleum refinery products, natural gas, fertilisers, coal, electricity, cement and finished steel indicate slowdown in economy, which has recorded a GDP growth of 6.9% during July-September quarter, lowest in nine quarters.
  • As per the data released by Commerce and Industry Ministry, barring electricity, cement and steel, all the segments registered negative growth in October 2011, raising concern for the industry and government. The dismal performance of the infrastructure sectors with a weightage of 37.90% in the overall industrial production is likely to weigh on the IIP numbers for October, scheduled to be released on December 12.
  • Economist and FICCI secretary general, Rajiv Kumar said the core sector numbers point towards slowdown in the economy. "We are in troubled times. The government must focus on strong reform measures to prevent further deterioration," Kumar said.
  • The coal sector was the worst performer recording a negative growth of 9%. Natural gas too showed a decline in production by 7.4% while fertilisers were down 2.1%. The decline in growth was also witnessed in the cumulative first seven months of the current fiscal with April-October displaying an expansion of 4.3% against 5.9% in the corresponding period last year
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