Reflecting slowdown in the economy, growth rate of eight core infrastructure industries slipped to 2.3 per cent in May mainly due to declining output of crude oil, coal, fertiliser and natural gas. The core industries had expanded at a rate of 7.2 per cent in the same period last year.
Cumulatively, in April-May 2013-14, the eight core sectors registered a growth of 2.4 per cent as against 6.5 per cent in the same period last year, according to official data. “The decline in the growth rate in May was mainly on account of negative growth witnessed in the production of coal, crude oil, natural gas and fertiliser,” it said.
Experts said the figures clearly reflect slowdown in policy decisions and infrastructural bottlenecks. “There is an urgent need to take steps to boost manufacturing. It will take some more months to see revival in the core sector data,” Crisil chief economist D K Joshi said. The contraction in production of coal, crude oil, natural gas and fertiliser in the month under review this year was at 3.3 per cent, 2.4 per cent, 18.7 per cent and 2 per cent, respectively. The eight core sector industries have a weight of about 38 per cent in the overall industrial production.
Petroleum refinery production showed an expansion of 5 per cent. However, the growth was subdued as compared to 23.4 per cent registered in May 2012. Steel production grew by 4.1 per cent as against 3.8 per cent, while cement output was up by only 3 per cent against 15.4 per cent in the review period. Growth in electricity generation stood at 6.2 per cent, as against 5.9 per cent expansion registered in the May 2012. The growth in eight infrastructure industries was 3.2 per cent in 2012-13 as against 5 per cent in the previous financial year. During April-May 2013-14, coal, crude oil, natural gas and fertiliser production declined to (-) 0.1 per cent, (-) 1.8 per cent, (-) 18.1 per cent and (-) 2.2 per cent, respectively. Cumulative growth of petroleum refinery and steel production during the first two months of the current fiscal was 5.3 per cent and 3 per cent respectively. Cement output slowed down to 5.6 per cent as compared to 13.9 per cent during April-May 2012-13. Similarly, electricity generation too slipped to 4.9 per cent as compared to 5.6 per cent.