India’s infrastructure sector output growth picked up in January, indicating industrial growth could be better in fiscal fourth quarter ending March compared with the three months to December.
Output of six key industries expanded 7.1 per cent in January, faster than a downwardly revised growth of 6.1 per cent in December, government data showed on Tuesday, but slower than the 9.1 per cent growth during the corresponding period last year.
"The infrastructure growth in January indicates that industrial output growth could be better in the fourth quarter, around 5 percent, though still affected by capacity constraints," said N.R. Bhanumurthy, an economist at National Institute of Public Finance and Policy, a Delhi-based think-tank.
In the annual budget for 2011/12, Finance Minister Pranab Mukherjee on Monday raised funds by 23 per cent for infrastructure sector and increased foreign institutional investment limit in infrastructure bonds to US$25bn from US$5bn.
India expects to invest about US$500bn in infrastructure, mainly in power, telecoms, roads, railways and oil pipelines, in five years to the end of March 2012 to lift growth to near double-digit levels.
It also aims to double spending on infrastructure to US$1tr in its next five-year plan, which runs from April 2012.