Slower growth in infrastructure

By Our Special Correspondent

NEW DELHI, JAN. 23. The infrastructure sector growth is slower than last year at 7.7 per cent in the first three quarters of the current financial year (April-December). This is against the 9.1 per cent growth recorded last year at the same time.

The growth has been most buoyant in the case of the oil refinery sector which has risen by 25.9 per cent. Steel output has also risen by 12.8 per cent, coal by 5.9 per cent, electricity by 4.7 per cent, cement by 2.3 per cent and crude petroleum by a marginal one per cent.

According to the data on the performance of six key infrastructure industries released by the Industry Ministry yesterday, oil refining, crude petroleum and coal have shown better growth than last year but the other three sectors of electricity, steel, and cement have recorded lower growth. The electricity sector, for instance, has recorded 4.7 per cent growth compared 7.5 per cent last year. Similarly cement output has risen by only 2.3 per cent as against 16 per cent over the same period in the previous fiscal. Steel production has also risen by 12.8 per cent, lower than the 15 per cent recorded in April-December 1999.

Regarding the electricity sector, the official assessment is that low growth of hydel power is the main reason for the declining trend since 1994-95. Low growth in hydel, in turn, is mainly due to factors such as high capital costs, remoteness of sites and resistance to large hydro dams on environmental issues.

As for the coal sector, it was pointed out that the declining trend was due to low capacity utilisation, low productivity levels, surplus manpower, high outstanding of coal sales, improper technologies and unduly long delays in project implementation. Domestic coal industry, however, is said to be looking forward for a favourable year with an expected rise in domestic consumption of the commodity and developments such as high international oil prices and depreciation of rupee against the dollar and Euro. These have made the coal sector relatively more competitive vis-a-vis imports of other competing products.

Send this article to Friends by E-Mail

Section  : Business
Previous : Select shares rally on FII buying
Next     : The elusive search for the quick fix