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Core sector growth revs up to 6.6% in Dec

Crude oil, petro products, steel drive growth.

Our Bureau

New Delhi, Jan. 31

Buoyed by a smart jump in the production of crude oil, petroleum refinery products and steel, the six key infrastructure industries' output growth recovered to 6.6 per cent in December 2010, after having slumped to a 21-month low of 3 per cent in November 2010.

Output in the six core industries — crude oil, petroleum refinery products, coal, electricity, cement and furnished steel — had expanded by 6.2 per cent in December 2009.

These six industries account for 26.68 per cent of the country's industrial output.

For the nine-month period April-December 2010, these six core industries recorded a growth of 5.3 per cent against 4.7 per cent in same period in the previous year, official data released by the Commerce and Industry Ministry showed.

IIP boost

The six core industries' strong show in December 2010 is likely to boost the overall index of industrial production (IIP) performance for that month, say industry observers. Growth in industrial output had sunk to 18-month low of 2.7 per cent in November 2010, raising concerns over the sustainability of economic growth momentum seen in the first half of the current fiscal.

Crude oil

Domestic exploration companies had produced 15.8 per cent more crude oil in December 2010 against 1.1 per cent growth in same month in the previous year. While crude oil production in December 2010 stood at 3.4 million tonnes, it was 2.9 million tonnes in the same month in the previous year.

Petroleum refinery output grew 8.3 per cent in December 2010 compared with 0.9 per cent in December 2009. This growth performance reversed a four-month declining trend.

Refiners including Indian Oil Corporation and Essar Oil processed 14.7 million tonnes or 3.48 million barrels a day of crude oil in December, according to the Petroleum Ministry.

Public sector IOC processed 27.3 per cent more crude oil to 4.9 mt. Hindustan Petroleum Corporation's output increased by 14.2 per cent to 1.5 mt in December.

Reliance Industries Ltd's output from its first refinery in Jamnagar, Gujarat, dropped by 0.8 per cent year-on-year at 3.1 mt. Reliance does not provide data for its second 29-million-tonne-a-year refinery. The combined capacity utilisation of 17 public sector and two private sector refineries in December stood at 111.4 per cent.

Steel output

Meanwhile, finished steel production grew 11.2 per cent in December 2010 compared with 9.6 per cent in same month in previous year. Finished (carbon) steel production in December 2010 stood at 5.17 million tonnes against 4.64 million tonnes in December 2009.

While coal production for the month under review grew 3 per cent (1.2 per cent in December 2009), cement output declined 2.2 per cent in December 2010 against 11 per cent in December 2009. Electricity generation grew 4.3 per cent in December 2010 (6.6 per cent in December 2009).

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