The Hindu Business Line : Infrastructure industries’ growth slumps to 4.2% in Jan

Infrastructure industries have slowed down at faster pace than overall industrial production. Infrastructure is leading the slowdown in the economy.

Our Bureau

New Delhi, March 19 On the heels of the deceleration in industrial production in January 2008, the six core infrastructure industries grew by 4.2 per cent in that month, almost half the 8.3 per cent growth seen in such industries in the same month last year.

The cumulative growth rate in these sectors during April-January 2008 declined to 5.5 per cent as against 8.9 per cent in the same period last fiscal, official data released today showed.

Crude oil production recorded a negative growth of 0.2 per cent in January 2008 as compared to 4.7 per cent growth in same month last year. Growth in coal production also declined to 4.8 per cent as against 9.9 per cent in January 2007.

Electricity sector witnessed 3.3 per cent growth in January 2008 as against 8.3 per cent growth in same month last year. The growth in output of the cement sector stood at 5.2 per cent as compared to 7.2 per cent.

The six core infrastructure industries are crude petroleum, petroleum refinery products, coal, electricity, cement and finished carbon steel. They cumulatively account for 26.7 per cent of the weightage in overall index of industrial production (IIP).

‘No surprise’

“The performance of the six core infrastructure industries in January 2008 does not come as a surprise. Industrial growth had slipped in January. This is a matter of concern. Infrastructure industries have slowed down at faster pace than overall industrial production. Infrastructure is leading the slowdown in the economy,” Mr D.K. Joshi, Principal Economist, Crisil, told Business Line.

He highlighted that signs of slowdown were earlier visible in consumer goods alone. They are now visible in infrastructure industries too.

In January, overall industrial growth had slipped to 5.3 per cent as compared to 11.6 per cent in the same month in the previous year.

The index of industrial production (IIP) moderated to 8.7 per cent during April-January 2007-08 as against 11.2 per cent during the corresponding period of the previous year. The slowdown during April-January 2008 was observed especially in textiles, metals, minerals, machinery and equipment and transport equipment.

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