Core infra sectors grow 6.3% in May, maintain 6%-plus expansion for fourth straight month

New Delhi: Eight core infrastructure industries grew 6.3% in May from a year earlier, slower than the revised rate of 6.7% for April but maintaining a 6%-plus expansion for the fourth straight month, according to government data released on Friday.

The sequential slowdown in May was partly caused by heightened election campaigns and heat waves over vast swathes of the country that likely impacted project executions and input supply, some experts said. While project executions could have improved in June after the elections, an unfavourable base effect could keep core sector growth around the same level as in May, they said. The slowdown, albeit not so sharp, in the core sector performance in May could also weigh in the Index of Industrial Production (IIP), given its 40% weight in the IIP. Industrial production had grown 5% in April. The IIP data for May will be released on July 12.

An impressive 12.8% year-on-year jump in power generation and 10.2% rise in coal output in May amid the heat waves remained unmatched by other infrastructure industries. These industries had grown 10.2% and 7.5%, respectively, in April.

Crude oil, fertiliser and cement production in May contracted from a year before by 1.1%, 1.7% and 0.8%, respectively. The output of steel grew 7.6% against 8.9% in the previous month and that of refinery products rose 0.5%, against 3.9%. Natural gas output expanded 7.5% in May, compared with 8.6% in the previous month.

The growth in core infrastructure industries in the first two months of the fiscal year touched 6.5%, against 4.9% a year before, the data showed.

"A combination of factors including the heat wave over parts of the country and the phased parliamentary elections could have curtailed activity and execution in some sectors (in May)," Icra chief economist Aditi Nayar said. "We expect the IIP growth print at 4-5% in May," she added.