Mumbai: The output of eight infrastructure sectors surged 4.4 per cent in May, the highest growth rate in past six months, boosted by a rise in production of coal (7.8 per cent), refinery products (7.9 per cent) and electricity generation (5.5 per cent). Crude oil production increased by 0.8 per cent, steel and cement by 2.6 per cent while fertiliser output grew by 1.3 per cent.
The May growth has reversed the five months negative trend since December 2014 when the rate of growth has been moving downwards to a low of -0.4 per cent in April. Growth in steel and cement was 2.6 per cent in June which could reflect some action in the infra space based on government expenditure during this period, said Care rating chief economist Madan Sabnavis.
“But it may be premature to form such a conclusion and clearly some more data points are required to be analysed before drawing firm conclusions of a turnaround,” he said. Also this should get reflected in a more positive number in growth in IIP for the month of May, he said. For the two months period growth was 2.1 per cent compared with 4.7 per cent last year.
Mr Sabnavis said that the fertilisers’ outlook should be positive given that the sowing season has started. The limited pick-up seen in cement, steel may not be sustained as the monsoon period is typically a dormant period for infra projects. The higher growth in refinery products should get reflected in India’s exports basket, he said. Natural gas recorded a negative growth of 3.1 per cent in May 2015.
