NEW DELHI: The output of eight core industries — coal, crude oil, natural gas, refinery products, fertiliser, steel, cement and electricity — grew 1.4 per cent in February, lower than the 6.1 per cent growth seen in same month last year.
The performance for the month of February was weighed down by a sharp contraction in steel output besides lower growth in electricity generation.
The data bring disappointment for the government which is banking on the industrial sector to kick-start growth in the Indian economy.
The core sectors growth was 1.8 per cent in January and contributes 38 per cent to the overall industrial production, a parameter that the Reserve Bank of India (RBI) takes into account while framing its monetary policy.
Production of crude oil and natural gas contracted by 1.9 per cent and 8.1 per cent respectively, according to the data released by the Commerce and Industry Ministry. However, coal, cement and electricity output grew by 11.6 per cent, 2.7 per cent and 5.2 per cent respectively.
Although the industry expects a reduction in rate from the apex bank for the growth of manufacturing and other sectors, the Reserve Bank of India (RBI) is likely to hit the pause button in its policy review meet on April 7, but might go for a 25 basis points cut by June, financial services group DBS said in its report.
According to the report, after surprise reduction in policy rates in March, no rate cut move is expected in the April 7 annual policy meet of the central bank.
During the April-February period of 2014-15, the eight sectors grew by 3.8 per cent as against 4.2 per cent in the same period of the previous fiscal.