March Core growth slips

India’s key infrastructure industries grew at a sluggish pace in March, weighed down by a contraction in output of natural gas and crude oil, suggesting that broader industrial growth may remain muted. Output at eight core industries-—coal, crude oil, natural gas, refinery products, fertilizer, steel, cement and electricity—grew at an annual rate of 2% in March against a 6.9% rise in the previous month. These industries have a 38% weight in the index of industrial production or IIP. IIP had risen 4.1% in February. The reading for March will be released on May 11. 
The core sector registered a cumulative growth of 4.3% in 2011-12, compared with 6.6% in the previous fiscal. Growth in all the eight industries decelerated from the previous month with natural gas and crude oil recording contraction. Crude oil production slipped into the negative zone at -2.9% from 0.3% in February. It had grown at an impressive 12.1% in March 2011. 
Output of natural gas saw the sharpest decline at -10.1% during the month. The sector has been in contraction for over a year because of stagnation in production at the KG-D6 basin. The only bright spot in the numbers was the relatively robust performance of coal. The sector grew 6.8% in March, compared to a contraction of 1.1% in the same month last year. 
This is being seen as a big positive as about 55% of India’s power generation capacity is based on thermal coal.