According to official data released on Tuesday, eight infrastructure sectors grew by 8.4 per cent in April, from 62.6 per cent in the same period a year ago. In March 2022, output from the eight infrastructure sectors — coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity — grew by 4.9 percent.
The core sector witnessed an exceptionally high growth rate of 62.6 per cent in April 2021 mainly due to the low base effect. The data showed that crude oil production declined by 0.9 per cent in April as against a decline of 2.1 per cent.
The Index of Eight Core Industries (ICI) measures the combined and individual performance of production in selected eight core industries – coal, crude oil, natural gas, refinery products, fertilizers, steel, cement and electricity. The eight core industries comprise 40.27 per cent of the weight of the items included in the Index of Industrial Production (IIP).
“The final growth rate of the Index of Eight Core Industries for January 2022 has been revised upwards from its provisional level of 3.7 per cent to 4.0 per cent. The growth rate of ICI during April-March 2021-22 was 10.4 per cent (p) over the corresponding period of the previous fiscal,” according to an official statement released on Tuesday.
Sunil Kumar Sinha, Chief Economist India Ratings and Research said, “Key sector data shows that the infrastructure industry grew by 8.5 per cent year-on-year in April 2022 (4.9 per cent in March 2022 and 62.6 per cent in April 2022), a six-month high . “
He said barring crude oil and steel, all other infrastructure industries registered positive growth in April 2022. Crude oil registered a year-on-year growth of -0.9 per cent, despite a low base (a contraction of 2.1 in April 2021). “Crude oil production has been weak for quite some time and has been in contraction for 53 months now. This means the country’s reliance on global crude oil will be even higher, which could be boiling over which could lead to imported inflation and its associated consequences for the economy.
Sinha also said that the growth in the core sector was mainly due to the record growth of 28.8 per cent in coal production. Other sectors that saw higher growth as per the latest data were electricity (10.7 per cent), petroleum and refinery products (9.2 per cent) and fertilizers (8.7 per cent). Notably, production growth in power and petroleum and refinery products was on a higher basis and at 8-month and 6-month highs, respectively.
Though coal and fertilizers registered impressive annual growth in April 2022, when compared to pre-COVID levels (February 2020), they still have some ground to cover as they are pre-COVID respectively. There are only 85.4 percent and 89 percent of the level. , The production of other core segments has also crossed pre-COVID-19 levels, pointing to a weak recovery in various infrastructure sectors. Ind-Ra expects IIP growth to be around mid-single digits in April 2022.
(with inputs from PTI)
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