Infrastructure Growth Slips In July

Indian infrastructure sectors'' gallop reduced to a trot in July, compounding the government''s disappointment with a slowdown in industrial production that signals a moderation in the country''s overall economic growth.

The growth of six core infrastructure sectors, which contribute slightly more than a quarter to industrial output, fell sharply to 6.3 per cent in July from 10.9 per cent in the year-ago month. Cumulative performance during April-July also dipped to 6.1 per cent from 8.7 per cent in the same period of the last fiscal, according to official data released Thursday.

All six sectors-cement, steel, coal, power, crude oil and petroleum refining-recorded a slower growth during the month as higher interest rates curbed demand for manufactured goods like automobiles and consumer durables, besides housing and commercial real estate.

The performance of infrastructure sectors merely mirrors the huge fall in industrial output-from 13.2 per cent in July 2006 to 7.1 per cent in July 2007.

The IIP (Index of Industrial Production) figures for July are disappointing, Finance Minister P Chidambaran said, but hoped demand will pick up once the festival season kicks off later this month.