Coal news and updates

 

Ahead of the Reserve Bank of India’s bi-monthly monetary policy on Tuesday, eight key infrastructure industries posted an impressive growth of 6.3 per cent in October — the highest since June when it stood at 7.3 per cent — bolstered by robust performance of the coal, power and refinery sectors.

The core sector, comprising coal, crude oil, refinery products, steel, fertiliser, cement, natural gas and electricity, had contracted 0.1 per cent during the same month last year. The growth rate was 1.9 per cent in September this year.

The jump in the growth of key infrastructure industries comes amid the manufacturing output, as per the HSBC Purchasing Managers’ Index, jumping to a 21-month high in November on the back of robust demand and new orders.

However, experts said that the growth in the core sector is not well balanced and the RBI is likely to maintain the status quo in its policy review.

“The PMI is up, the core sector has grown. There is some pick-up but it is partially the base effect as well. Year-on-year there has been some pick-up but it has not been a balanced growth,” DK Joshi, chief economist, Crisil, said.

He added that the industrial production, which is due on December 12, will show an improvement due to better performance of the core sector.

The core sector comprises 38 per cent of the index of industrial production (IIP), which had grown 2.5 per cent in September. However, Joshi said, it is unlikely that the Reserve Bank of India will cut rates in its upcoming monetary policy review on Tuesday.

“The Reserve Bank of India would like to wait to ensure that the inflation is completely under control. So (despite the industry demands) I don’t think there will be rate cut,” he said.

According to the figures released by the commerce and industry ministry, production of coal jumped 16.2 per cent compared to a contraction of 3.5 per cent in October 2013.

Similarly, electricity generation also climbed up 13.2 per cent compared to 1.3 per cent during the same period last fiscal. Production in the coal and electricity sectors stood at 7.2 per cent and 3.8 per cent, respectively, in September 2014.

Aditi Nayar, senior economist, ICRA, said that the pick-up in core sector growth would partly offset the disappointing performance of merchandise exports and auto production in October along with the impact of fewer working days on account of an earlier onset of the festive season. Further, growth of production of refinery products also improved to 4.2 per cent compared to 5 per cent in October 2013. It had contracted 2.5 per cent during last month.

The production of cement however shrank 1 per cent as against growth of 0.9 per cent year-on-year while that of steel moderated to 2.3 per cent compared to 5.8 per cent during the corresponding year-ago period.

 

 

 

Source: http://indianexpress.com/