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The core sector has for a second consecutive month shown signs of moderate uptick, growing at a seven-month high of 3.7 per cent in August against 3.1 per cent in July 2012, according to the ministry of commerce and industry.
The eight infrastructure sectors had expanded at a three-month high of 6.1 per cent in July, after sluggish growth in the previous months.
This takes the overall growth in April-August this year to 2.3 per cent, compared with 6.3 per cent in the corresponding period last financial year.
"These are definite signs of improvement and the overall infrastructure growth has been stable this month," said Madan Sabnavis, chief economist at CARE ratings. However, he added, it was too early to say if these could be 'green shoots' of recovery. "For that, we need to look at the broad trend in the Index of Industrial Production (IIP) data."
The growth in infra sectors was due to expansion in the electricity, cement and coal segments. "The surprise element is coal, which has shown great improvement," said Sabnavis. The sector rose at a 10-month high of 5.5 per cent in August against 11.8 per cent in the corresponding month last year. Electricity surged 6.7 per cent, an over one-year high, against 1.9 per cent in August 2012. Cement, which grew at a sluggish pace the previous month, expanded at a seven-month high of 5.5 per cent, against a mere 0.4 per cent growth in August last year.
The output of natural gas, contracting for almost three years, continued to do so in August. It fell 16.1 per cent against a fall of 13.5 per cent in the corresponding month last year. This segment of the core sector has been declining since December 2010. Crude oil output also declined, for a fifth straight month. The contraction was 1.5 per cent against a decline of 0.6 per cent a year before.
Experts said infra growth would have positive impact on overall industrial output but a recovery needed a distribution of growth. "The core sector contributes 38 per cent to the IIP and till all the broader components reflect growth, there cannot be a recovery," said Sabnavis. Industrial output grew at a four-month high of 2.6 per cent in July, when the core sector had expanded 3.1 per cent. However, that was mainly due to a spike in the electrical machinery segment, which grew 83.6 per cent in July. This had contributed 1.6 per cent to IIP growth.
Refinery products rose 4.9 per cent in August against a massive 31.8 per cent in August 2012. Steel output expanded 4.3 per cent against 2.9 per cent in August 2012. Fertiliser grew marginally by 1.7 per cent, against a contraction of 2.1 per cent.
This takes the overall growth in April-August to 2.3 per cent, compared to 6.3 per cent in the same period of 2012-13.
