India’s eight core infrastructure sectors grew by only 2.3% in September as against 3.3% a year ago. These core industries constitute more than a third of the key index of industrial production. The coal under-performed by a huge margin recording a negative trend of 18%, followed by dip in natural gas production and fertilizers by 6.4% and 2.1% respectively.
Moreover, even Steel output lost momentum during September month with a tepid 6.6% growth rate. Cement production has cooled down substantially with 0.9% growth, mired by slowing real-estate demand and infrastructure spending in the country.
Earlier, India’s August IIP data had also witnessed a sluggish growth with lower than expected 4.1% rise from a year ago period. Industrial output growth for the month of July eventually settled at 3.84% on revised data entry.
The eight core industries – crude oil, fertilizers, coal, natural gas, electricity, petroleum refinery and finished steel – accounts for as much as 3.790% in the overall IIP. The slower growth rate recorded in these sectors can be partly attributed to increasing funding costs on account of 13 interest rate hikes administered by RBI during the last 19 months.