Web Exclusive | June 2014
Core infrastructure post strongest growth in April
By Rahul Kamat
Core infrastructure industries are roaring again. Sectors such as electricity, steel, coal, cement and fertilisers are robust. While growth in electricity, steel and cement is a harbinger of an improvement in the construction industry, the recent lifting of the mining ban in Goa and a temporary respite in Odisha and Karnataka is likely to revive manufacturing activities.
Let's take a look at the performance of the core infrastructure sector. The core infrastructure industries, with a weightage of 37.9 per cent in the Index of Industrial Production, grew 4.2 per cent in April 2014 as against 3.7 per cent a year ago. In the same month, electricity (11.2 per cent) and fertilisers (11.1 per cent) posted the strongest growth followed by cement (6.7 per cent) steel (3.1 per cent) and coal (3.3 per cent).
According to experts, electricity, steel and cement (a combined weightage of 19 per cent) are likely to continue to grow robustly. That said, Sujan Hajra, Sr. Analyst, Anand Rathi comments, "While coal has already gained momentum, the improvement in operational and procedural aspects would further help the sector."
According to Sujan Hajra and Moumita Samanta, Sr. Analysts, Anand Rathi, the eight core infrastructure industries continue to do much better than industrial production overall. Growth was broad-based, with six of the eight sectors (excluding refineries and steel) doing better y-o-y than last month. Electricity growth was back to double digits. Fertilisers surprised on the higher side by posting a strong figure. But importantly, growth in coal and cement has picked up momentum and steel is buoyant.
Meanwhile, the performance of core industries has yet to be reflected in the headline IIP figures.
Strong growth in April 2014
Coal sector growth has bottomed out
Double digit growth in electricity
Source: Government of India