Increase in power generation pushes up infrastructure performance

Apart from electricity, the other infrastructure sectors that form part of the IIP include coal, crude petroleum, petroleum refinery products, cement and finished (carbon) steel. All these sectors have a combined weight of 26.7 per cent in the IIP.

It is interesting to note that the largest swing in growth rates was witnessed in crude petroleum, where this sector, during November 2006, witnessed a growth of 10.1 per cent as compared to the previous year’s growth of (-) 8 .5 per cent. This sector, however, has a weightage of 4.17 per cent in the IIP. This swing in growth rate is also captured in the increase in the growth rate of petroleum refinery products where the growth rate increased from 1.5 per cent in November 2005 to 16.4 per cent in November 2006.

What is worrisome is the growth in the coal sector. Despite good growth in electricity generation seen in 2006, the growth rate of this sector, which has a weightage of 3.22 per cent, has fallen to 4.9 per cent in November 2006 as compared to November 2005’s growth of 6.9 per cent. The data also shows that the cumulative growth of the coal sector between April-November 2006 stood at 4.8 per cent as compared to a growth of 6.1 per cent for the entire last fiscal.

Finished steel, which after electricity has the highest weight in the IIP, also showed a fall in growth rate during the month of November. While this trend was also seen in October, the actual figures show that the growth in this sector came down from 14.8 per cent in November 2005 to 9 per cent in November 2006.