FM concerned over slow infra growth

Apprising Prime Minister Manmohan Singh of a slowdown in key infrastructure sectors, like coal, steel and construction, Finance Minister P Chidambaram has said bottlenecks to production in these areas must be removed.

In a recent letter to the Prime Minister, Chidambaram said: "Our assessment is that there has been a slow down in key infrastructure sectors. While there is no evidence of a slow down in investment, bottlenecks to enhanced production need to be addressed and removed."

The shortfall is more pronounced in areas like coal, finished steel, railway revenue freight traffic, fertiliser and natural gas production, construction and strengthening of four-lane national highways, Chidambaram said in the letter.

During April-June this fiscal, coal production stood at 97.57 MT, which is a mere 0.7% growth over the same period last year. Production of crude oil and natural gas have, on the other hand, shown a negative growth of 0.7% and 4.5% respectively for the first quarter.

Growth of railway revenue freight traffic has dipped significantly by 5.4% to 185.25 MT. In April-June FY07 the growth rate was 9.9%.

Fertiliser production has also witnessed a slow down by 5.9% to 3.4 MT as compared to 3.62 MT.

Despite the slow down in these key areas, the economy has continued its upward march with a 9.3% growth in the first quarter this year.

Even though growth in the first quarter is marginally less than 9.6% recorded during comparable period last year, the economy has done commendably well as it comes on top of high 9.4% growth recorded during FY07.