The output of eight core infrastructure sectors grew 3.3% in August this year, the lowest in nine months, as compared to 12.2% in the year-ago period, according to the official data released on Friday as quoted by news agency PTI.
These eight infrastructure sectors include coal, crude oil, natural gas, refinery products, fertilizer, steel, cement, and electricity. The production growth of these sectors was 9.8% during April-August this fiscal as against 19.4% a year ago.
As per the latest data, crude oil, and natural gas production contracted by 3.3% and 0.9% respectively during the month under review while in August, the fertilizer output increased by 11.9% against a contraction of 3.1% in the same month last year.
The growth rates for coal, refinery products, steel, cement, and electricity slowed to 7.6%, 7%, 2.2%, 1.8%, and 0.9%, respectively, according to the data.
Aditi Nayar, Chief Economist at ICRA Ltd said that a normalizing base and weak demand for electricity and construction activity during the heavy rains appear to have dampened the core sector growth in August 2022.
She added the low sector growth suggests that the IIP may record a mid-single digit rise in August, while the record high GST e-way bills were encouraging.
The agency reported that the previous low was in November 2021 at 3.2% and stood at 4.5% in July. The overall pace of growth in 2021 was higher compared to a contraction of 1.1% seen in November 2020.
The growth rate of ICI during April-November 2021-22 was 13.7% as compared to the corresponding period of FY2020, it said, noting that final growth rate for August 2021 has been revised to 12.2% from its provisional level 11.6%.
Eight core industries – coal, crude oil, natural gas, refinery products, fertilizers, steel, cement and electricity – comprise 40.27% of the weight of items included in the Index of Industrial Production (IIP).
(With PTI inputs)
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