Bringing in some relief for the Centre, eight key infrastructure industries clocked in a growth of 4.2 per cent in April, with the cement and electricity sectors posting healthy growth during the month.
The growth, though indicates an uptick in the economic activity, it is also due to a weak base in the last fiscal, which witnessed a growth of 2.7 per cent only.
According to the core sector data released by the commerce ministry on Monday, the eight key industries — coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity — had grown at 3.7 per cent during the corresponding period last fiscal.
Economists said that core sector data volatility notwithstanding, higher trend is expected during FY15 compared to the last fiscal because of revival in investor sentiments due to expectation of stalled reforms getting a push.
The cement production during April grew 6.7 per cent compared to 5.2 per cent during the same period in FY14. Growth in the sector remained flat in March.
The electricity generation rose 11.2 per cent year-on-year during the month. It had grown 5.4 per cent in March.
However, the natural gas production still remains a cause of concern, posting a negative growth throughout the last financial year.
It contracted 7.7 per cent during the month compared to a contraction of 17.4 per cent during the corresponding year-ago period.
Crude oil production has also remained precarious in FY14.
It shrank 0.1 per cent in April as against a contraction of 1.2 per cent last year.
“Natural resources sector needs to be revived urgently. Administrative bottlenecks remain, they need to be done away with. If gas price issue is resolved, the natural gas sector may see a revival,” DK Joshi, chief economist at Crisil, said.
He, however, added that the FY15 is going to witness higher growth trend.
The index of industrial production (IIP) is also likely to grow at a higher pace due to better performance of the core sector, which comprises 38 per cent of the IIP.
The index of industrial production data is due June 12. Coal production rose 3.3 per cent compared to 1.2 per cent in corresponding period FY14, while fertilisers production was a robust 11.1 per cent as against a contraction of 2.4 per cent during the year ago period.