Core infrastructure sector growth slows to 4.3% in March

Growth in the output of eight core infrastructure sectors eased to 4.3% in March from a year earlier, compared with 6% in the previous month, reflecting the fragility of industrial recovery as the favourable base effect continued to wane.

Data released by the industry ministry on Friday showed five out of eight sectors witnessed a slowdown while only three — fertilisers, cement and electricity — saw a pick-up in March.

However, compared with the pre-Covid level, six of the eight industries (barring crude oil and fertilisers) recorded growth in March.

The core sector has a 40.3% weight in the index of industrial production (IIP).

With this, core infrastructure sectors grew 10.4% in FY22, driven mostly by a favourable base effect (output of these sectors had contracted by 6.4% in FY21 in the wake of the pandemic).

The production of coal and crude oil contracted by 0.1% and 3.4% in March.

The growth in the output of natural gas, steel, cement and electricity slowed down to 7.6%, 3.7%, 8.8% and 4.9% during March, against 12.5%, 5.9%, 5% and 4.5%, respectively, in the previous month, the data showed.

Commenting on the core sector performance, Icra chief economist Aditi Nayar said: “While the growth of the core sector output and non-oil merchandise exports slowed in March 2022, several high frequency indicators witnessed an improvement, based on which we expect the year-on-year IIP growth to rise modestly to 3-3.5% in that month.”