NEW DELHI: Infrastructure sector growth bounced back to a 15-month high in February, raising hopes of a pickup in industrial activity after three months of negative growth.
The Index of Eight Core Industries, widely called the core sector index, was up 5.7% in Februrary compared with 2.9% in the previous month and was the highest since 8.5% recorded in November 2014, data released by the commerce department on Thursday showed. The overall growth in April-February FY16 was 2.3%.
The eight infrastructure sectors that make up the core sector index — coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity — together have a 38% weightage in the index of industrial production (IIP).
Industrial production has contracted in the three months to January. A 5.7% rise in items having 38% weight in the IIP raises hopes of positive industrial production growth in February. The industrial production numbers will be released on April 12.
The rebound in core sector was driven by strong growth in cement, electricity and fertiliser sectors. Seven out of eight sectors that make up the core index reported positive growth in February. Only steel posted negative output growth of 0.5% in February.
Cement production was up 13.5% while fertiliser output rose 16.3%. Both natural gas and crude posted positive output growth after four months of contraction. Electricity generation rose 9.2% in February while coal production rose 3.9%.
Deficit at Rs 5.73 lakh crore in Apr-Feb
The fiscal deficit at the end of February was at 107% of full-year estimates, suggesting that the government should be able to meet the target of keeping this at 3.9% of GDP for the year.
Data released by the government showed a April-February fiscal deficit of Rs 5.73 lakh crore compared with the revised estimate of Rs 5.35 lakh crore for the full fiscal made in the budget.
Higher revenues in the last month of the fiscal should help government claw back ground in March. In FY15, nearly a quarter of the entire tax revenue came in March and a similar performance this year should help the government meet its fiscal deficit target.