Core sector growth slows to 2.3 per cent in May

Core sector growth slows to 2.3 per cent in May

Growth in India's eight key infrastructure sectors fell to 2.3 per cent in May from 4.2 per cent in the previous month, mainly due to a contraction in outputs from the refinery and steel and natural gas, the commerce ministry said Monday.

The output of core industries — coal, crude oil, natural gas, refinery products, steel, cement, fertilisers and electricity — had grown 5.9 per cent in May last year.

The growth moderation in the core sector, which accounts for 38 per cnt of the total weight of the Index of Industrial Production, indicates a subdued performance in the infrastructure sectors in May.

Natural gas and refinery products output contracted by 2.2 per cent and 2.3 per cent respectively in May. This is the 42nd consecutive month in which natural gas output has contracted on year.

Steel production, last seen contracting in October 2012, fell in May by 2.0 per cent, a 12-month low. Crude oil production also saw a contraction of 0.3 per cent in May.

Electricity production rose by 6.3 per cent in May, while fertiliser production rose by 17.6 per cent, close to levels last seen over four years ago. Analysts said that going forward they expected a further slowing in growth of electricity sector, especially power generated from hydro-electric plants if monsoon is less than normal and there is not enough water reservoirs.