Key infrastructure sectors' growth rises to 5.2% in March

The growth of eight key infrastructure sectors rose to 5.2 per cent year-on-year in March due to improvement in the output of crude oil, cement and electricity, according to official data released on Tuesday. In 2023-24, the growth rate in the output of these eight sectors was 7.5 per cent, marginally down from 7.8 per cent recorded in the year-ago period.

The growth rate in March, however, is lower than in February. It was 7.1 per cent in the preceding month.

The growth of eight core sectors -- coal, crude oil, natural gas, refinery products, fertiliser, steel, cement and electricity -- was 4.2 per cent in March 2023.

The eight core sectors contribute 40.27 per cent to the country's Index of Industrial Production (IIP).

Refinery products and fertiliser recorded a contraction in the output, according to the data.

The growth rate in the output of crude oil, cement and electricity rose to 2 per cent, 10.6 per cent and 8 per cent in March against negative growth in these sectors a year ago.

Commenting on the data, Icra Ltd Chief Economist Aditi Nayar said electricity generation displayed a healthy expansion in March 2024 and maintained a robust pace in April 2024, with rising heat likely to boost agricultural and household demand.

"Similar to the trend displayed by the core sector, IIP growth is likely to moderate somewhat in March 2024 as the leap year effect fades. We project the IIP growth at 3.5-5 per cent in March 2024," she said.