To: arun gera who wrote (70068 ) 1/31/2011 5:52:21 AM From: elmatador Respond to of 217530 India aims to double spending on infrastructure to $1 trillion in its next five-year plan, which runs from April 2012. India's Dec infrastructure output accelerates * Infrastructure sector output grows 6.6 pct in Dec * Oil, coal, steel output rise in Dec but cement contracts * Data an advance indicator of industrial output (Adds details, background) NEW DELHI, Jan 31 (Reuters) - India's infrastructure sector output ININFR=ECI accelerated in December, reinforcing expectations that growth in industrial output remains on track despite capacity constraints. Output of six key industries grew 6.6 percent in December, faster than an upwardly revised growth of 3 percent in November, government data showed on Monday, but slower than the broader economic growth of about 8.5 percent this year. Crude oil and petroleum refinery products output grew 15.8 percent and 8.3 percent, respectively, from a year earlier. Finished steel output rose more than 11 percent, but cement production contracted 2.2 percent, indicating a slack in construction activity. The infrastructure sector makes up more than 26 percent in the index of industrial production, although underinvestment in infrastructure and delays in project execution have long been a drag on economic growth. Kamal Nath, a high profile minister who was in charge of roads and transport, was recently shifted to the ministry of urban development. Nath had pledged to build 20 kilometres of roads a day but work on the ground fell short of that target. The infrastructure data is considered an advance indicator of growth in industrial output, which has been volatile in recent months, although the dominant concern for India's central bank is tackling headline inflation, caused partly by the knock-on effects of high food prices. India's annual industrial output INIP=ECI slowed to an 18-month-low of 2.7 percent in November, raising fears of slowing industrial growth due to capacity constraints and waning demand after the Indian festive season. However, headline inflation of above 8.40 percent prompted the Reserve Bank of India to raise rates last week for the seventh time since March to stem price pressures. India expects to invest about $500 billion in infrastructure, mainly in power, telecoms, roads, railways and oil pipelines, in five years to the end of March 2012 to lift growth near double digit levels. It aims to double spending on infrastructure to $1 trillion in its next five-year plan, which runs from April 2012.