Growth in key infrastructure sectors rose 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 a significant increase in coal, natural gas and electricity production, although the pace of growth is lower than in April, according to official data released on Friday. Production in eight sectors increased by 6.7% in April.

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

Official data showed that production of fertilizers, crude oil and cement recorded negative growth in May.

In April and May of the current fiscal year, the production of these sectors increased by 6.5 per cent compared to 4.9 per cent in the same period of the previous fiscal year.

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

The growth rate in the production of refinery products and steel slowed down to 0.5 percent in the month under review. and 7.6 percent

The eight main sectors account for 40.27 percent of the country’s Industrial Production Index (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 parts of the country and staggered general elections, may have restricted activity and enforcement in some sectors.

“At the same time, the heatwave has increased energy demand, which has resulted in higher growth of coal and electricity in May 2024 compared to the previous month. We expect IIP growth to be 4-5 percent in May 2024,” she added.