PMEAC relaxes growth of the Indian mining sector in FY 2010-11

Prime Minister’s Economic Advisory Council (PMEAC) Economic Outlook said that the government is going to ease the growth of the country’s mining sector to 8% in FY 2010-11 despite higher economic growth of the country.

PMEAC’s Economic Outlook, said, "The council expects that there will be an easing in the growth rate in 2010-11 and we have set this estimate at 8 per cent, both for output as well as the GDP arising in this sector,"

In FY 2009-10, the Indian mining sector observed a growth of 10 percent but in 2010-11 the growth will cut down to 8.5 percent and to 7.4 percent in 2011-12.

The natural gas sector grew by 45 percent in 2009-10 as additional gas from the KG Basin would become available but the PMEAC said that there would be no major growth in natural gas sector in 2010-11.

Unlike the natural gas sector, the crude oil sector did not see much growth for the last couple of years. In 2009-10, it registered a positive growth of 0.5 percent. In 2008-09, there was a decline of 1.8 percent.

In 2009-10, total output of crude oil stood at 33.7 million tones against a production target of 38.0 MT. PMEAC said that the main reason behind this short fall was the delayed out put from Cairn’s Barmer oilfield in Rajasthan which caused a potential loss of 2.6 MT.

As oil has started to flow from these fields, PMEAC predicts an output of 36MT in FY 2010-11 which would translate into a 7 percent growth which is still less than the target set in the last fiscal year.