BS reported that production of the 8 core sector industries grew by only 1.6% in January against 2.1% in December, pulled down by coal, petroleum refinery products and natural gas.

Since the core sector has roughly 28% in the Index of Industrial Production, the data showed factory production might remain subdued in January as well. Industrial production had declined for three months in a row till December.

Even at 2.1% growth in the core sector, there was a 0.6% contraction in industrial production in December. If industrial production does not recover in January and the trend persists in February and March, overall economic growth might fail to recover in the fourth quarter as well. The economy grew below 5% in September-December for a seventh quarter in a row.

The extent of problems in the core sector, fertilisers, cement, steel, electricity, crude oil, coal, petroleum refinery products and natural gas can be gauged from the fact that it grew 8.3% in January 2013. In contrast, the growth was 2.4% during the April to January period of this financial year, compared with 6.9% in the same period of 2012 to 2013.

Coal output contracted 0.7% in January. Petroleum refinery production fell 4.5% and natural gas output by 5.2%. Steel output growth slowed to 3.4%, while expansion in cement production eased to 1.5%. Crude oil registered growth of 3% and electricity generation expanded 5.7%.