The output of eight infrastructure sectors registered a growth of 3.6 per cent in March 2023, the slowest in five months, showed government data released on Friday. The output of core sectors had increased by 7.2 per cent in February 2023 and 4.8 per cent in the year-ago month. The previous low was 0.7 per cent in October 2022.
The output of crude oil declined by 2.8 per cent, power by 1.8 per cent and cement by 0.8 per cent in March this year.
On the other hand, coal production recorded an increase of 12.2 per cent, fertilisers 9.7 per cent, steel 8.8 per cent, natural gas 2.8 per cent and refinery products 1.5 per cent.
The growth rate of eight infrastructure sectors — coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity — stood at 7.6 per cent in FY23, down from 10.4 per cent recorded in 2021-22.
The core sector or key infrastructure industries have a 40.27 per cent weight in the overall index of industrial production (IIP).
Aditi Nayar, chief economist and head (research & outreach) at ICRA, said, “The halving in the YoY core sector growth to a five-month low 3.6 per cent in March 2023 from 7.2 per cent in February 2023, was fairly broad-based, with only coal and crude oil displaying a sequential improvement.”
She added that output of some of the sectors is likely to have been dampened by the unseasonal rainfall, such as electricity and cement, which displayed a YoY contraction in March 2023 along with crude oil. At the same time, coal, fertilisers and steel displayed a healthy expansion in excess of 8 per cent in March 2023, which is encouraging.
“Dampened by a high base and heavy rainfall, the YoY performance of most of the available high-frequency indicators weakened in March 2023, relative to February 2023, similar to the trend in the core sector. Accordingly, ICRA expects the YoY growth in the IIP to dip to 3-4 per cent in March 2023,” Nayar said.
(With Inputs from PTI)
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