India Infrastructure Sector Increases by 7%

By admin • December 1st, 2010

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The infrastructure sector in India grew by 7% in October 2010, an increase of 3.1% compared to the same period during 2009. The core industries; cement, coal, crude oil, electricity, finished steel and petroleum refinery products had increased by 2.7% for September. Both these increases are expected to have a positive effect on the Index of Industrial Production (IIP) for October, especially as the core industries account for 26.7% of the IIP.

The IIP is an economic indicator released monthly by the Federal Reserve Board which measures the amount of output from the manufacturing, mining, electric and gas industries.

The large increase in growth was a result of a rise in cement production of 16.8%, crude oil of 8.4% and electricity generation of 8.4%, compared to 5.3%, -2.1% and 4.4% last year. Finished steel increased by 3.8% to 6.2% and coal grew by 0.8%. The only negative performance was from petroleum refinery products which decreased by 4.8%. Statistics from the Ministry of Commerce did show that the cumulative performance data for the April-October period has however stayed the same at 4.9% compared to April-October 2009. Crude Oil did show a very large increase of 10.7% during the April-October period compared to 1.3% last year.

The explanation of the April-October 2010 data being the same for the 2009 period is due to slow growth for the past few months, then the large increase in October. The infrastructure industry is now hoping this momentum can carry on for 2011.


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