BUSINESS

Infrastructure growth slips in May

Special Correspondent

NEW DELHI: The rate of growth in the six core infrastructure industries slipped to 3.5 per cent in May this year as compared to 7.8 per cent notched up in the same month a year ago, mainly owing to rising interest rates and higher input costs.

According to the official data released here on Wednesday, the growth rate of the six sectors, namely, power, cement, coal, steel, crude oil and petroleum products, dipped to 3.5 per cent during the first two months of the current fiscal from 6.9 per cent during April-May 2007-08.

Considering that the six industries account for a combined weightage of 26.7 per cent in the index of industrial production (IIP), the deceleration in growth is likely to contribute to lower overall industrial growth if the declining trend continues.

Significantly, one of the poorest performers among the six industries was electricity generation which accounts for the highest weight of 10.17 per cent in the IIP. While its growth rate slumped to a mere two per cent in May from a robust 9.3 per cent during the same month a year ago, its performance during April-May was also equally dismal at 1.7 per cent as compared to the nine per cent growth achieved in the first two months last fiscal. The slowdown in infrastructure sector growth has been partly on account of a rise in the cost of raw materials, borrowings and fall in demand from the construction and other allied sectors.

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