The core infrastructure sector’s growth slowed down to 4.3 per cent in March due to a decline in the output of coal and crude oil, though for the full 2021-22 fiscal, the core sector recorded a 10.4 per cent expansion, according to official data released on Friday.

The eight infrastructure sectors — coal, crude oil, natural gas, refinery products, fertiliser, steel, cement and electricity — had expanded 6 per cent in February.

During April-March 2021-22, the eight core sectors grew 10.4 per cent compared with a contraction of 6.4 per cent in 2020-21.

The output of coal and crude oil contracted 0.1 per cent and 3.4 per cent, respectively, in March.

The growth in the production of natural gas, steel, cement and electricity slowed down to 7.6 per cent, 3.7 per cent, 8.8 per cent and 4.9 per cent during the month under review .

Refinery products and fertilisers output grew 6.2 per cent and 15.3 per cent respectively in March .

Madan Sabnavis, Chief Economist, Bank of Baroda said “core sector growth slowed down to 4.3 per cent in March on a high base of 12.6 per cent last year. There was also a decline in growth rate compared with Feb when it was 6 per cent.”

“The first signs of the power problem that we have today could be seen in a decline in coal output by 0.1

per cent over 0.3 per cent growth last year. Power growth however was steady at 4.9 er cent.

High growth in cement by 8.8 per cent can be directly

attributed to the last push given by the government on infrastructure though growth in steel was weak at 3.7per cent.”

“The bounce back in fertilizers by 15.3% may be attributed to a decline of 5% last year as companies gear up for re-stocking in preparation for kharif. Also the rise in prices of fertilizers post the war has also helped in providing incentive to producers. Crude oil production had fallen by 3.4% due to production constraints. Refinery products however did better with 6.2% growth aided by exports and revival in domestic consumption with full opening of the economy,” he added.

Aditi Nayar, Chief Economist, ICRA Ltd, said that the pace of core sector growth slowed to a “sedate” 4.3 per cent in March 2022, with a slowdown in five of the eight constituents.

The double-digit growth recorded by fertiliser output in March came on the back of a very low base, she said adding in spite of the pickup in mobility, the growth in output of refinery products moderated in March.

“While the growth of the core sector output and non-oil merchandise exports slowed in March, several high-frequency indicators witnessed an improvement, based on which we expect the YoY IIP (index of industrial production) growth to rise modestly to 3-3.5 per cent in that month,” Nayar added.

The eight core industries comprise 40.27 per cent of the weight of items included in the IIP.