• FEBRUARY 18, 2000

Core sector growth revs up

The core (infrastructure) sector recorded a growth rate of 8% YoY during April to January 2000 as compared to a growth of 2.9% on the corresponding period last year. The core sector however grew by a modest 5.2% during January.

The key contributors to growth have been the petroleum refinery products, cement and steel sectors. Crude output however continued to decelerate during this period. The high rates of growth in the core sectors will come as a relief to many who consider infrastructure to be a key bottleneck in India's attempts to log higher rates of growth.

Looked at from another point of view, the pick up in demand for steel and cement has buoyed overall growth. This reflects the pick up in domestic construction activity. Whether this will spill over into higher levels of investment activity as yet remains to be seen. Already signs, although not concrete, of a pick up in investment activity are becoming evident.

The core sector accounts for 26.68% of the Index of Industrial Production (IIP) and would therefore contribute to higher growth in the IIP, which is a broader representative of industrial growth.

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