Key infrastructure sectors grew 6.3% in May from 6.7% in April, ET Infra

NEW DELHI: Growth in eight key infrastructure sectors rose 6.3 per cent in May on the back of healthy expansion in coal, natural gas and electricity production, although the growth rate is lower than in April, according to official data released on Friday. Output in eight sectors increased by 6.7 percent in April.

Growth in these key sectors – coal, crude oil, natural gas, refined products, fertilisers, steel, cement and electricity – was 5.2% in May 2023.

Official data show that the production of fertilizers, crude oil and cement recorded negative dynamics in May.

During the April-May period of the current fiscal year, the production of these sectors grew by 6.5% as compared to 4.9% in the same period of the previous fiscal year.

Coal, natural gas and electricity production increased by 10.2%, 7.5% and 12.8%, respectively, compared to 7.2%, (-) 0.3% and 0.8% in May 2023.

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The pace of growth in production of refined products and steel slowed to 0.5 percent and 7.6 percent in the month under review.

The eight major sectors contribute 40.27% to the country’s Index of Industrial Production (IIP).

Commenting on the data, Icra Ltd Chief Economist Aditi Nayar said that while growth in the primary sector remained above 6 per cent for the fourth consecutive month, it declined slightly in May.

She added that a combination of factors, including a heatwave in some parts of the country and a phased general election, may have limited activity and enforcement in some sectors.

“At the same time, the heat wave increased the demand for power, which translated into an increase in the dynamics of coal and electricity prices in May 2024 compared to the previous month. In May 2024, we expect the IIP to increase by 4-5 percent,” she added.

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