Growth in key infrastructure sectors rose 6.3% in May from 6.7% in April

New Delhi: According to official data released on Friday, growth in eight key infrastructure sectors was 6.3 percent in May thanks to significant increases in coal, natural gas and electricity production, although the pace of growth is lower than in April.

Production across eight sectors rose 6.7 percent in April.

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

Official data shows 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.

The growth rate of production of refined products and steel slowed down in the analysed month to 0.5 per cent and 7.6 per cent.

The eight major sectors account for 40.27 per cent of the country’s Index of Industrial Production (IIP).

Commenting on the data, Icra Ltd. Chief Economist Aditi Nayar said that while growth in the core sector remained above 6 percent for the fourth consecutive month, there was a slight decline 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.

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