Decline in core infra worrying: PHD Chamber

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SME Times News Bureau | 02 May, 2015
Decline in core infra is worrisome as the growth has been witnessing a subsiding trend since November 2014, said Alok B Shriram, President, PHD Chamber in a press statement issued in New Delhi on Friday.

The core infra has declined to (-) 0.1% (Y-O-Y) in March 2015 as compared to 1.4% (Y-O-Y) in February 2015. There has been a decline in almost all lead indicators such as Coal from 11.6% in February 2015 to 6% in March 2015, Refinery products from -1% in February 2015 to -1.3% in March 2015, Cement from 2.7% in February 2015 to -4.2% in March 2015 and Electricity from 5.2% in February 2015 to 1.7% in March 2015.

The lead indicators for the construction sector such as cement and steel are decelerating significantly and indicating slowdown in economic activity, said Shriram.

In cumulative terms also, core infrastructure industries declined from 4.2% during April-March 2013-14 to 3.5% during April- March 2014-15.

At this juncture, there is a strong need to push the dynamic policy regime at the ground level to refuel demand especially the rural demand, he said.

Core industries' output growth slowed to a 15-month low of 0.1 percent in March, on the back of a contraction in the production of steel, cement and refinery products, government data showed on Thursday.

The eight core industries had expanded by 4 percent in March 2014. The growth was 1.4 percent in February. The infrastructure sector, comprising coal, crude oil, oil refining, natural gas, steel, cement, electricity and fertilisers, accounts for 38 percent of the country's overall industrial production. Production of natural gas in March fell by 1.5 percent, while crude oil production rose instead by 1.7 percent. Refinery products, cement and steel output declined by 1.3 percent, 4.2 percent and 4.4 percent respectively. However, coal and fertilisers production grew by 6 percent and 5.2 percent respectively.

Electricity generation grew by 1.7 percent in March 2015 compared to 5.4 percent in the same month last year. For the full 2014-15 fiscal, the eight sectors also slowed down to 3.5 percent, from 4.2 percent in previous financial year ended in March 2014.