India's Core Infrastructure Sectors Show Steady Growth in December
India's eight core infrastructure industries recorded a 3.7% growth in December, according to official data released on Tuesday. This marks the second consecutive month of expansion, following a marginal contraction in October. The positive trend signals resilience in key economic sectors.
Detailed Performance Across Sectors
The commerce department provided comprehensive figures for December. Output volume growth for coal, crude oil, natural gas, refinery products, fertilizers, steel, cement, and electricity stood at 5.1% in December 2024. November's growth was revised upward to 2.1%.
These core industries hold significant weight, accounting for 40% of India's Index of Industrial Production (IIP). From April to December this fiscal year, they expanded by 2.6%, compared to 4.5% during the same period last year.
Expanding and Contracting Industries
December's data reveals a mixed performance. Five industries showed growth compared to the previous year:
- Coal output increased by 3.6%
- Fertilizer production expanded by 4.1%
- Steel output grew by 6.9%
- Cement production surged by 13.5%
- Electricity generation rose by 5.3%
However, three sectors experienced contraction:
- Crude oil production declined by 5.6%
- Natural gas output shrank by 4.4%
- Refinery products decreased by 1%
Cement Leads with Strong Infrastructure Demand
Cement has demonstrated steady growth since November 2024, reflecting robust demand for infrastructure development. The central government has consistently increased capital expenditure in recent years to stimulate economic growth and attract private investments.
According to the first advance estimate of GDP for the current financial year, the construction sector's real output is expected to grow by 7%. This represents a slight moderation from the 9.4% growth recorded in FY25.
Energy Sector Dynamics and Economic Outlook
Output of crude oil and natural gas has been consistently moderating, indicating the maturing nature of India's oil and gas fields. Oil imports constitute approximately one quarter of the country's total merchandise imports.
The government actively works to enhance the share of clean energy and new-age fuels like green hydrogen and nuclear power in the overall energy mix.
India's economy projects growth of 7.4% in the current financial year, up from 6.5% in the previous period. Strong manufacturing, services, healthy household spending, and robust fixed asset investments support this expansion.
However, a benign inflation scenario may keep nominal GDP growth below expectations. The first advance estimate released this month projected an 8% nominal growth, the softest since the pandemic-induced slump of 2021.
