|
Growth of the key sectors is back on track. The index of the six core industries namely crude oil, petroleum refinery products, coal, electricity, cement and finished carbon steel—has turned positive and saw growth of 2.9% in March 2009 over same period last year.
Compared to the last six months, it has been recorded to be the highest growth rate which is higher than the average of 2.7% witnessed for 2008-09 as a whole.
Economists pointed out that a recovery might be round the corner. According to DK Joshi, principal economist at ratings agency CRISIL, “These are some positive signals. Benign cues from the global economy might add to the speed of recovery. But I will wait for another couple of months before taking a call on the strength of the recovery.” .
The biggest surprise in the basket of core sectors was electricity generation, which touched a 13-month high. According to the Central Electricity Authority chairman Rakesh Nath, ”the availability of coal has improved and the units that were commissioned last year are working well, resulting in higher generation of power.”
Giving further strength to Cabinet secretary KM Chandrashekar’s assessment that the economy is beginning to respond to the booster shots administered by the government, cement production surged 10.1% in March. JK Cement group executive president RG Bagla said, “Increased government spending on infrastructure led to higher demand for cement in March.”
Production of coal has grown by 5.2% in the year and showed a cumulative growth of 8.1% for the fiscal. Annual growth in finished carbon steel production has come down by 2.6% in March, raising concerns. The country is however hopeful it would recover in the coming months. Naveen Vohra, partner at Ernst & Young expects steel production and consumption to pick up soon. He further added, ”Demand in the auto sector has also started looking up on the back of a marginal improvement in the credit situation.”
The steel industry staged a smart recovery in the first three months of 2009 on account of a revival in the auto, rural infrastructure and housing sectors, and is expected to gather further momentum hereon.
Petroleum refinery products has also grown to 3.3% which is the highest growth rate in last 5 months—in the meanwhile the production of crude oil has dropped from 8.1% in January to 2.3% in March. The Economic Times
April 30, 2009
|
