Growth in eight core industries slowed to 1.8 per cent in January, the lowest in 13 months. Negative growth in crude oil and natural gas and low growth in steel, cement and electricity have led to the dip in the overall growth rate of core industries.
The eight core sector industries — coal, crude oil, natural gas, refinery products, fertilizer, steel, cement and electricity — had expanded by 3.7 per cent in January, 2014.
The growth was 2.4 per cent in December, 2014.
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The data set was revised in January, 2014, when the growth rate was 3.7 per cent, and the figures before that period were not comparable. The 1.8 per cent growth in January, 2015, is the slowest in the 13 months of the revised data.
The core sector contributes 38 per cent to the overall industrial production, a parameter that the RBI takes into account while framing its monetary policy.
Production of crude oil and natural gas contracted by 2.3 per cent and 6.6 per cent, respectively, according to the data released by the Commerce and Industry Ministry.
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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.
Coal and refinery products
However, coal and refinery products output grew by 1.7 per cent and 4.7 per cent, respectively, against 1.2 per cent and contraction of 4.2 per cent in the year ago period.
During the April-January period, the eight sectors grew by 4.1 per cent as against 4 per cent in the same period of the previous fiscal.
“The sluggish performance of available lead indicators, such as the low growth of core industries and automobile production as well as the contraction in merchandise exports, foretell a muted outlook for IIP growth for January 2015,” rating agency ICRA said.