India’s infrastructure sector growth slowed to 4.2 per cent in August hit by a decline in crude oil and fertiliser production and sluggish performance of coal, steel, refinery products and natural gas sectors.

Of the eight core sectors which contribute 40 per cent to the Index of Industrial Production (IIP), cement (weight of 5.37 per cent) posted the highest growth of 14.3 per cent in August over the same month last year, followed by electricity generation (weight of 19.85 per cent) which grew by 5.4 per cent, according to an official release circulated on Monday.

In July, the core sector had posted an increase of 6.6 per cent, while in the month of June the growth was even higher at 6.7 per cent. “In what appears to be the dilution of the positive base effect of GST witnessed on growth numbers of IIP so far this year, especially since June, the core sector data suggest a slowdown in growth to 4.2 per cent,” said Madan Sabnavis, Chief Economist, CARE Ratings. For August, IIP growth may be in the region of 4.5-5 per cent, he added. The estimate is much lower than the IIP growth of 6.6 per cent posted in July.

The cumulative growth in the combined index of eight core industries during April-August, 2018-19 was 5.5 per cent.

Coal production (weight of 10.33 per cent) increased 2.4 per cent in August, 2018 over August, 2017. There was a marginal increase in natural gas production (weight of 6.88 per cent) which increased by 1.1 per cent during the month.

Petroleum refinery production, which is one of the largest contributor to IIP (weight of 28.04 per cent), increased 5.1 per cent.

Steel production (weight of 17.92 per cent) increased 3.9 per cent.

There was a decline in the production of crude oil (weight of 8.98 per cent) by 3.7 per cent in August while fertilisers production (weight of 2.63 per cent) fell 5.3 per cent.

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