Core sector growth rate slows to 3-month low of 4.1% in March

NEW DELHI: The growth of eight core sectors slowed to 3-month low of 4.1 per cent in March due to weak performance in as many as six sectors including coal, crude oil and natural gas.

The other sectors which showed slower growth rate were refinery products, steel and electricity.

The growth rate of eight infrastructure sectors, which also include fertilisers and cement, was 5.2 per cent in March 2017, according to the data released by the commerce and industry ministry on Tuesday.

The previous low was in the core sectors was 3.8 per cent in December 2017.

Cumulatively, the eight core sectors grew by 4.2 per cent in 2017-18, lowest in the last three financial years. The growth was 4.8 per cent in the previous fiscal and 3 per cent in 2015-16.

The core sector would have an impact on the Index of Industrial Production (IIP) data as these eight segments account for about 41 per cent of the total factory output.

Output growth rate of only fertliser and cement reported healthy numbers. Both the sectors grew by 3.2 per cent and 13 per cent respectively in March.

On the other hand, coal, natural gas, refinery products and steel production growth slowed to 9.1 per cent (as against 10.6 per cent in March 2017), 1.3 per cent, 1 per cent, 4.7 per cent (as against 11 per cent a year ago) respectively during the month under review. Electricity generation growth rate too decelerated to 4.5 per cent as against 6.2 per cent in March 2017.

Crude oil recorded a negative rate of growth of 1.6 per cent in March this year.

Some 356 infrastructure projects, each costing 1.5 billion rupees or more, had been delayed by up to five years, leading to a total cost overrun of 2.19 trillion rupees ($32.9 billion), according to government estimates.

Infrastructure output, which comprises eight sectors such as coal, crude oil, natural gas, steel, cement and electricity, accounts for nearly 40 percent of India's industrial output.

Steel output growth slowed to 5.6 percent in the year ending in March from 10.7 percent in the previous year. Cement output was up 6.3 percent in same period compared to a 1.2 percent fall, indicating a pick up in construction activity.