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Core sector growth plunges to 8-month low of 1.9% in September

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Growth of core sector industries plunged to eight-month low of 1.9% in September as output in crude oil, natural gas and fertiliser declined, raising concerns of subdued industrial production numbers. The eight core sectors -- coal, crude oil, natural gas, refinery products, fertiliser, steel, cement and electricity -- grew by 9% in September last year. The growth stood at 5.8% in August this year.

Production in crude oil, natural gas, refinery products and fertiliser has registered a drop of 1.1%, 6.2%, 2.5% and 11.6% respectively in the month under review, according to the data released by the Commerce and Industry Ministry. Expansion in coal, cement, steel and electricity too slowed down to 7.2%, 3.2%, 4% and 3.8% respectively in September this year. These sectors had registered a growth of 13.6%, 12.1%, 10.7% and 12. % in September 2013 respectively.

Commenting on the numbers, rating agency ICRA said: "Although the core sector growth has slipped considerably in September in sequential terms, an earlier onset to the festive season is likely to have provided some boost to various sectors of manufacturing. Nevertheless, IIP growth is likely to have been subdued in September." The eight core sectors have a combined weight of about 38% in the Index of Industrial Production (IIP). In January 2014, the eight core industry index registered an overall growth of 1. %. During April-September, the eight sectors grew by 4%, against 5% in the year-ago period.

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