India’s core infrastructure sectors recorded a growth of 6.3% in May, driven primarily by substantial increases in coal, natural gas, and electricity production, according to official data released on Friday, June 28. This growth represents a slight moderation from the 6.7% growth seen in April but still indicates a robust performance in critical sectors.
Coal production was a key driver, showing a month-on-month (MoM) growth of 10.2% in May, up from 7.5% in April. Natural gas production also contributed significantly with a growth rate of 7.5%, although this was a slight slowdown from the 8.6% MoM growth observed previously. Electricity production stood out with a remarkable 12.8% increase, compared to 10.2% in the prior month, further bolstering the overall growth of the core sectors. Conversely, crude oil production experienced a decline of 1.1%, contrasting with a 1.6% growth MoM. The refinery products sector exhibited modest growth at 0.5%, down from 3.9% MoM. Fertiliser production saw a contraction of 1.7%, worsening from a 0.8% decline MoM, while steel production, though strong at 7.6%, was slightly lower than the 8.8% MoM growth recorded in April. Cement production also declined marginally by 0.8%, compared to a 0.5% decline MoM.
Year-on-year (YoY) comparisons paint a positive picture, with the growth of these core sectors significantly higher than the 5.2% recorded in May 2023. Despite some sectors experiencing negative growth rates, the overall output for April-May of the current fiscal year rose by 6.5%, surpassing the 4.9% growth recorded in the same period last fiscal year.
These eight core sectors—coal, crude oil, natural gas, refinery products, fertiliser, steel, cement, and electricity—are vital to India’s industrial framework, collectively contributing 40.27% to the country’s Index of Industrial Production (IIP). The performance of these sectors is a crucial indicator of the economic health and industrial momentum of the nation. The robust growth in May, despite some sectoral declines, underscores the resilience of India’s industrial infrastructure. The surge in coal and electricity production highlights the country’s efforts to meet growing energy demands, while the expansion in natural gas production reflects ongoing efforts to diversify energy sources.
However, the declines in crude oil, fertiliser, and cement production suggest areas where additional focus and strategic interventions may be necessary to sustain overall growth. The data points to the need for continued investment and policy support to enhance production capabilities and address the challenges faced by these sectors.
As India continues to navigate the complexities of global economic conditions, the performance of its core sectors will remain a key determinant of its industrial strength and economic trajectory. The positive growth in May sets a promising tone for the fiscal year, indicating potential for sustained industrial development and economic resilience.
