Millennium Post

Jan core sector growth crashes from 8.3 to 1.6%

The Index of Eight Core Industries grew 2.1 per cent in December. The eight core industries — fertilisers, cement, steel, electricity, crude oil, coal, petroleum refinery products and natural gas — have a combined weight of about 38 per cent in the Index of Industrial Production (IIP).

Core sector growth was 2.4 per cent during the April-January period of this financial year compared with 6.9 per cent in the same period of 2012-13. Coal output contracted 0.7 per cent in January. Petroleum refinery production registered a fall of 4.5 per cent and natural gas output shrank 5.2 per cent.

Steel output growth slowed to 3.4 per cent, while the expansion in cement production eased to 1.5 per cent. Crude oil registered a growth of 3 per cent and electricity generation expanded 5.7 per cent. Dashing hopes of a recovery, the IIP contracted by 0.6 per cent in December mainly due to poor performance in the manufacturing sector.

Meanwhile, fiscal deficit in the 10 months through January 2014 has overshot revised estimates of Rs 5.24 lakh crore for this fiscal provided by Finance Minister P Chidambaram in his interim Budget last week. According to the data released by Controller General of Accounts (CGA) on Friday, the fiscal deficit during April-January 2013-14 worked out to be Rs 5.32 lakh crore or 101.6 per cent of the revised estimates.

The government had in the budget for 2013-14 proposed to bring down the fiscal deficit to 4.8 per cent of GDP or Rs 5.42 lakh crore. This figure, however, was revised downwards in the interim budget to Rs 5.24 lakh crore or 4.6 per cent of the GDP.

With actual figures for February and March yet to come, it would be difficult for the government to restrict fiscal deficit, which is a reflection of government’s market borrowings to revised level. As per the CGA data, the revenue deficit during the 10- month period through January was Rs 3,78,850 crore or 102.3 per cent of the revised estimate.

Government’s total expenditure, however, was only 79.8 per cent of the revised estimates of Rs 15,90,434 crore. The data further revealed that revenue receipts during April-January period was Rs 7,21,905 crore or 70.1 per cent of the revised estimates.
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