S Gangadharan

Despite a rally of sorts in March 2008, the composite index of infrastructure industries rose by a tepid 5.6% during 2007-08; in contrast, the performance was much better in the preceding fiscal at 9.2%.

The composite index stood at 279.8 in March, notching up a rise of 9.6% on a year-on-year basis; though short of the incremental growth of 10.5% in March 2007, given the constraints that the constituent industries — crude oil, petroleum refinery products, coal, electricity, cement and finished steel — are subject to, the output during that month appears to be satisfactory.

The yearly showing is lacklustre.

But what is instructive is that, generally speaking, the growth rate of the infrastructure industry index has lagged behind the general index of industrial production.

In 2007-08 while the overall index was up by 8.1% — and the extent of the deceleration was modest compared with the previous year’s spurt of 11.6% — the composite index of infrastructure industries, which has a weight of nearly 27% in the industrial index, has tended to under-perform with the jump being only 5.6% in the last fiscal, down by more than three percentage points from the growth rate in 2006-07.

Infrastructure-led growth of industry is not to be.

Perhaps, the intriguing aspect is that, though the infrastructure industries form part of the larger index, the details of their working have been released days after the overall industry trend has been officially published.

Normally, the information regarding the infrastructure is made available some weeks before the larger picture is placed in the public domain. Obviously, the latter cannot be ready unless the output data for the various industry groups are already with the official machinery.

In this sense, the latest information is largely of academic interest and the reason for the delayed release is not clear.

Among the individual industries, difficulties in boosting crude output are still persisting.

No wonder then that the crude output during 2007-08 was higher by a mere 0.4% — less than the meager climb of 5.6% in 2006-07. In finished steel, the tempo slumped to 5.1% from 13.1% and in refined petroleum products to 6.5% from 12.9%.

In coal, there was a marginal pick-up in the growth rate at 6%.

But cement and power generation were on a low key, with the output in the former slackening to 8.1% from 9.1% and in the latter from 6.3% from7.3%.

Source : DNA