Infrastructure growth falls sharply this year

NEW DELHI, JULY 9: Unrelenting international prices of crude Oil and other commodities continue to haunt India’s industrial growth prospects as the index of industrial production for the six core infrastructure sectors grew by a meagre 3.5 per cent in the 12 months to May this year. Growth of production in the six core infrastructure sectors — crude oil, oil refinery products, electricity, coal, cement and steel — was less than half the 7.8 per cent growth in the corresponding period in the previous year.

This is the third month that core IIP has registered such a growth rate. The growth in the previous two months was 3.4 per cent and 3.6 per cent for March and April respectively. The index for the core sectors, which account for 26.7 per cent of the IIP, stood at 242.3, up from 234.1 last year.

The index of production of crude oil grew by 3.2 per cent as against a decline of 1.6 per cent for the corresponding period last year whereas that for oil refinery products grew by just 0.1 per cent compared to a growth of 14.9 per cent last year.

Coal production, however, did relatively better with a growth of 8.3 per cent up from 0.5 per cent last year.

Electricity generation, on the other hand, grew by only 2 per cent as against a growth of 9.3 per cent last year. Growth in cement and steel, both of which had done well last year, also suffered.

Speaking to The Indian Express, R Venkatesan, industry division head at the National Council of Applied Economic Research, said that the fact such a dismal growth rate has continued for three months in a row could be worrisome, but as of now it seems it is a temporary situation emerging out of the current global economic turmoil.

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