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India's eight key infrastructure sectors recorded a slower growth of 3.8% earlier this month, a decline from the 6.3% expansion seen during the same period last year. The dip was largely driven by subdued coal, crude oil, and natural gas performance. While cement and fertilizer output showed double-digit and high single-digit growth, crude oil and natural gas production contracted. For the full financial year 2024-25, core sector growth fell to 4.4%, down from 7.6% in the previous fiscal. These sectors hold a 40.27% weight in the Index of Industrial Production (IIP).
Growth in India's eight core infrastructure sectors decelerated to 3.8% earlier this month, easing from the stronger 6.3% recorded during the same period last year. The moderation was primarily due to sluggish output in coal and crude oil, according to official data released earlier this week. Advertisement
Month-on-month, the sector's growth picked up marginally compared to the 3.4% rise seen in the previous month. However, several segments recorded either slower or negative output. Crude oil and natural gas production both contracted, while coal output growth was limited to 1.6%.
Similarly, output from refinery products and electricity showed only modest growth of 0.2% and 6.2%, respectively. Steel production rose by 7.1%, but this, too, marked a slowdown. In contrast, fertiliser production rebounded sharply, rising 8.8% compared to a contraction of 1.3% in the same month last year. Cement remained a bright spot, with output increasing by 11.6%, up from 10.6% during the year-ago period.
Cumulatively, for the April-March period of FY25, the eight core sectors posted a growth of 4.4%, a notable drop from the 7.6% achieved in the previous financial year. These sectors, comprising coal, crude oil, natural gas, refinery products, fertiliser, steel, cement, and electricity, contribute over 40% to the Index of Industrial Production (IIP), a key indicator of overall industrial performance.
ICRA's Chief Economist Aditi Nayar observed that, given the core sector's latest performance, the firm projects IIP growth to be in the range of 3-3.5% for the same period.
The tempered pace could reflect underlying challenges such as supply-side issues, lower energy demand, or sectoral inefficiencies. With core sectors directly influencing the broader Index of Industrial Production, policymakers may need to assess structural impediments and implement strategic interventions to revive momentum, particularly as India pushes for robust economic growth in the coming quarters.
Source: PTI
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