By Manoj Kumar
NEW DELHI (Reuters) – India’s infrastructure output contracted in March, for the first time in five months, as the national lockdown imposed late last month to combat the new coronavirus hit steel, cement and fertiliser production.
The annual infrastructure output, comprising almost 40% of industrial output, shrank 6.5% in March compared to an upwardly revised 7.1% growth in the previous month, the data released by the Ministry of Commerce and Industry on Thursday showed.
Economists expect even worse numbers for April and May as economic activities have all but come to a halt because of the COVID-19 pandemic.
Darren Aw, Asia Economist at Capital Economics Singapore, said there were growing signs that economic growth would remain lacklustre long after the virus fades.
“Large parts of the manufacturing sector look set to remain inactive for an extended period,” he said.
To slow the coronavirus outbreak, the government has put the country under a lockdown that has already lasted for more than a month and is expected to be extended until the middle of May. The country has recorded over 33,600 coronavirus cases and 1,075 deaths, while global cases have risen to over 3 million.
During the 2019/20 fiscal year ending in March, output rose 0.6% from the same period a year ago, according to the data.
Fitch rating agency has cut the country’s GDP growth forecast for fiscal year ending March 2021 to 0.8%, sharply down from its previous forecast of 5.6% before the coronavirus outbreak.
Cement production was down by 24.7% in March from the year ago period and steel output contracted 13%, pulled down by a fall in demand and the national lockdown, the data showed.
Electricity generation was down 7.2% in March year-on-year while coal output grew at 4%.
(Additional reporting by Aftab Ahmed; Editing by Gareth Jones and Emelia Sithole-Matarise)