The index of eight core industries released by Office of the Economic Adviser showed growth slowing down to 1.8 per cent in January over the year-ago period after growing 2.4 per cent in December. The cumulative growth during April 2014-January 2015 eased to 4.1 per cent compared with 4.4 per cent in April-December 2014.
The eight core industries comprise nearly 38 per cent of the weight of items included in the Index of Industrial Production (IIP). The data bring disappointment for the government which is banking upon the industrial sector to kick-start growth in the Indian economy. The Index of Industrial production released last month showed growth slowing down for the month of December to 1.7 per cent.
The survey shows that natural gas and crude oil were the only two sectors which witnessed a decline with highest growth rate being recorded in Fertilizers by 7.1 per cent and refinery products by 4.7 per cent in January.
Electricity generation which has the highest weight of 10.32 per cent increased by 2.7 per cent and registered a cumulative growth of 8.9 per cent for the April-January period. Steel industry, which has the second highest weight, increased by 1.6 per cent for the month and in cumulative terms.
Coal production with a weight of 4.38 per cent increased by 1.7 per cent in January over the year-ago period. Its cumulative index during April-January 2014-15 increased by 8.1 per cent over the corresponding period of previous year.
The recent figures from eight core industries indicate a further slowdown in the industrial production figures. While Economic Survey released last week showed better prospects for the economy highlighting the government’s effort to boost manufacturing. The government also made some tweaks in duty structures to support local manufacturing in its first full-year Budget but skipped past some endemic issues like labour laws, which affect the sector.
The government would release IIP figures for January on March 12, 2015.