Key infra sectors' growth slows to 4% in Dec 2024, shows govt data

The output of eight key infrastructure sectors slowed down to 4 per cent in December 2024, as against 5.1 per cent growth registered a year ago, according to data released by the Ministry of Commerce and Industry on Friday.

 

On a monthly basis, the growth rate in the production of these sectors was lower than the 4.4 per cent expansion recorded in November 2024.

 

In December, production of natural gas output recorded a negative growth.

 

The production growth of coal, refinery products, fertiliser, and steel moderated to 5.3 per cent, 2.8 per cent, 1.7 per cent, and 5.1 per cent, respectively, against 10.8 per cent, 4.1 per cent, 5.9 per cent, and 8.3 per cent in December last year. However, cement and electricity output rose to 4 per cent and 5.1 per cent in the month under review. 

 

The growth of core sectors —coal, crude oil, natural gas, refinery products, fertiliser, steel, cement and electricity — was 4.2 per cent during April-December this financial year. It was 8.3 per cent in the same period last financial year. Paras Jasrai, senior economic analyst, India Ratings says that the growth in the core sector output was led by coal, steel and electricity. In fact, the electricity output growth stood at a five-month high, supported by the onset of winters in the northern regions thereby lifting up the power demand. 

 

“Steel and cement sectors were greatly supported by government capex which has picked up well in the past few months. The general government capex (24 states and union) grew at a robust 50.8 per cent to a nine-month high of Rs 1.9 trillion in December 2024,” he added.

 

The eight core sectors contribute 40.27 per cent to the Index of Industrial Production (IIP), which measures overall industrial growth.

 

Aditi Nayar, chief economist, Icra Ratings says that the core sector growth eased slightly in December 2024 from November as four of the eight constituents witnessed a deterioration in their performance between these months. Growth in cement output decelerated quite sharply in December, led by the dissipation of the favourable base. 

 

“Among other constituents, the growth in output of coal, refinery products and fertilisers witnessed a modest deceleration between these months. Icra expects the IIP growth to moderate somewhat to 3-5 per cent in December 2024 from 5.2 per cent in November, partly on account of an unfavorable base,” she added.