Infrastructure Sectors See 6.3% Growth Despite Challenges

The growth of India's eight key infrastructure sectors rose by 6.3% in May, driven by coal, natural gas, and electricity production, despite being slightly lower than April's 6.7%. Fertilizer, crude oil, and cement saw negative growth. Chief Economist Aditi Nayar cites a heatwave and elections as potential limiting factors.

The growth of India's eight key infrastructure sectors rose by 6.3% in May, according to official data released on Friday. This uptick is attributed to healthy expansions in coal, natural gas, and electricity production, although it marks a slight decrease from April's 6.7% growth.

The production of these core sectors—coal, crude oil, natural gas, refinery products, fertilizer, steel, cement, and electricity—was 5.2% in May 2023. Notably, fertilizer, crude oil, and cement output recorded negative growth in May.

Chief Economist Aditi Nayar of Icra Ltd remarked that while core sector growth sustained above 6% for the fourth consecutive month, it eased slightly in May. The heatwave and phased parliamentary elections possibly curtailed activity in some sectors, even as demand for power surged. Nayar anticipates the Index of Industrial Production (IIP) growth to print at 4-5% in May 2024.