Slowdown in infrastructure sector

By Our Special Correspondent

NEW DELHI, MARCH 22. The growth rate in the infrastructure sector has slowed down to a negative 1.4 per cent in February, bringing the growth for April-February 2001 down to 5.2 per cent. This is significantly lower than the buoyant growth of 9.2 per cent recorded in the same period last year.

According to data released by the Industry Ministry today, the infrastructure sector including electricity, coal, steel, crude oil, oil refining and cement industries had witnessed an 11.3 per cent growth in February 2000. In contrast, there has been a decline in output in February this year.

An official analysis of the production data for February shows that steel, crude oil and oil refinery products have recorded positive growth rates while cement, electricity and coal registered negative growth rates.

During the first eleven months of the current financial year, the cement sector has shown a negative growth but all other sectors have recorded positive growth. This is, however, much lower than last year. The oil refining sector has shown the highest growth with a rise of 21.7 per cent even though this is lower than the 25.2 per cent growth recorded last year.

The steel output has risen by 5.8 per cent as against 15 per cent growth recorded last year. The recovery in this sector appears to be abating, judging by the latest data. The steel industry began a declining trend since 1995-96 when the output rose to a peak of 21.9 per cent. Subsequently, it reached a low of 1.3 per cent in 1998-99 and a modest recovery was registered during 1999-2000 when a 12.5 per cent growth was recorded.

In the electricity sector, the 4.1 per cent growth is lower than the 7.2 per cent over the same period last year. In February this year, the growth rate was a negative 1.1 per cent. Growth in the coal sector during April-February was also lower at 4 per cent compared to the 3.2 per cent in the same period last year.

Crude petroleum continued to show sluggish growth an increase of 1.4 per cent though this is higher than the negative growth of 1.9 per cent over the same period in the previous year.

Cement, on the other hand, has witnessed a discernible decline with negative growth of 0.3 per cent compared to 14.9 per cent last year. The Industry Ministry says the problems faced by the cement industry are numerous but the main issues are heavy burden of taxes, poor demand growth and inadequacy of infrastructure facilities needed for the industry's growth.

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