The infrastructure sector output growth rose to a four-month high in September but two key sectors - steel and cement - contracted, posing some concerns over the overall strength of the key segment.
Data released by the commerce and industry ministry on Monday showed the core sector spanning coal, crude oil, natural gas, refinery products, fertilizers, steel, cement and electricity rose 3.2% in September compared to 2.6% in the same period last year and previous month's 2.6%. The core sector accounts for 38% of the index of industrial production. Industrial output growth rose to a three-year high of 6.4% in August, triggering hopes of a rebound in the key sector.
Experts said the numbers were still weak and overall industrial growth would be in the 3%-4% range.
"Not much pick-up in infra sector seen so far. Government spending has yet to get reflected in these numbers. A lot will depend on how the government's finances turn out in next half of the year. While disinvestment target will not be met, tax revenue and dividend income could be increasing. It needs to be seen if it will be able to maintain its capex plans," said Madan Sabnavis, chief economist at Care Ratings.
"Industrial growth more likely to be in the range of 3-4% again this month with base effect resisting upward movement in September even though consumer spending should be up," he said.
Data released by the commerce and industry ministry on Monday showed the core sector spanning coal, crude oil, natural gas, refinery products, fertilizers, steel, cement and electricity rose 3.2% in September compared to 2.6% in the same period last year and previous month's 2.6%. The core sector accounts for 38% of the index of industrial production. Industrial output growth rose to a three-year high of 6.4% in August, triggering hopes of a rebound in the key sector.
Experts said the numbers were still weak and overall industrial growth would be in the 3%-4% range.
"Not much pick-up in infra sector seen so far. Government spending has yet to get reflected in these numbers. A lot will depend on how the government's finances turn out in next half of the year. While disinvestment target will not be met, tax revenue and dividend income could be increasing. It needs to be seen if it will be able to maintain its capex plans," said Madan Sabnavis, chief economist at Care Ratings.
"Industrial growth more likely to be in the range of 3-4% again this month with base effect resisting upward movement in September even though consumer spending should be up," he said.
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