The country’s infrastructure sector output grew 5.1 per cent in September from a year earlier, significantly higher than last month’s 2.3 per cent, although the pace was slower than last year.
The growth in infrastructure sector, which accounts for 26.68 per cent of the overall industry, was slower than last year’s 5.7 per cent growth in September.
During April-September 2008-09, six core-infrastructure industries registered a growth of 3.9 per cent as against 6.9 per cent during the corresponding period of the previous year, raising concerns that current and planned projects might be facing a credit squeeze.
Infrastructure companies have been hemmed by a hard domestic interest rate regime after Reserve Bank of India (RBI) maintained raised key rates to suck out liquidity to tame a runaway inflation rate that has hovered above a worrisome 12 per cent for several weeks before beginning to decline.
The government has recently raised overseas borrowing limits. Under the new norms, infrastructure companies can borrow up to $500 million in a year from overseas markets for spending in the home country.