The official data released on Tuesday showed that the growth of eight key infrastructure sectors in India has slowed down to a 4-month low of 8.1% in September 2023, compared to 8.3% from the previous year. The growth rate of refinery products, fertilizers, cement, and electricity has decelerated during this period, while crude oil production has experienced a negative growth.
These eight industries, which include crude oil production, contribute to 40.27% of the Index of Industrial Production (IIP). The previous low point was recorded in May, with a growth rate of 5.2% for these sectors.
Specifically, crude oil output decreased by 0.4% in September compared to a contraction of 2.3% in the same month last year. In August, the core sector experienced a growth rate of 12.5%, the highest since June 2022 when it was 13.2%. However, the output growth of the eight sectors was lower at 7.8% in April-September 2023-24, compared to 9.8% in the same period the previous year.
In September, coal production increased by 16.1%, natural gas production by 6.5%, and steel production by 9.6%. On the other hand, the growth rate of refinery products, fertilizers, cement, and electricity slowed down to 5.5%, 4.2%, 4.7%, and 9.3% respectively in September 2023, compared to the corresponding figures from the previous year.
Aditi Nayar, Chief Economist at Icra Ltd, highlighted that the core sector expansion in September has reached a four-month low of 8.1% due to the expected increase in rainfall, affecting the growth of seven out of the eight constituent sectors, with the exception of fertilizer output. She stated, “The year-on-year growth in cement production decelerated sharply to a six-month low of 4.7% in September…The IIP growth is likely to moderate to high single digits in September taking a cue from the core sector’s trajectory.”
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