2 min readNew DelhiMay 1, 2014 01:21 AM IST
First published on: May 1, 2014 at 01:21 AM IST
The key infrastructure industries clocked a growth of just 2.6 per cent in FY14, compared to 6.5 per cent growth recorded in FY13 , amid declining exports and industrial contraction. This might pose serious challenge for the incoming government which will inherit a slowing economy.
According to the data released by the commerce ministry on Wednesday, the eight core industries — coal, refinery products, natural gas, fertilisers, steel, cement and electricity — grew 2.5 per cent in March compared to 4.5 per cent registered in February and 7 per cent recorded during March 2013.
Among the eight industries, the electricity generation outperformed other sectors. The growth in electricity generation was 5.6 per cent during the fiscal.
This was followed by the steel production which grew 4.3 per cent in FY14 compared to 4.1 per cent in FY13. Both electricity generation and steel production grew 5.4 per cent in March.
While natural gas and crude oil production remained in the negative zone for the year, fertilisers output bettered during the period. It grew 1.5 per cent in FY14 compared to a contraction of 3.4 per cent during the same period inFY13.
Aditi Nayar, senior economist, ICRA, said, “The slack core sector in conjunction with the decline in merchandise exports in year-on-year terms point towards a likely industrial contraction in March”.
DK Joshi, chief economist, Crisil, said that in the current fiscal, a mild growth in the core sector is expected partly due to a weak base. “However, monsoon and political configuration will decide the growth trajectory,” he added.
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