Growth in key infrastructure sectors in May was 6.3%. compared to 6.7 percent in April, ET Infra

NEW DELHI: Growth in eight key infrastructure sectors rose 6.3 per cent in May on strong growth in coal, natural gas and electricity production, although the pace of growth was slower than in April, according to official data released on Friday. Output in the eight sectors rose 6.7 per cent 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.

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.

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 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 core sector growth remained above 6 per cent 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 increased energy demand, resulting in higher coal and electricity growth in May 2024 compared to the previous month. We expect IIP growth to be 4-5 percent in May 2024.” – she added.