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India's industrial output growth weakens in April

India's industrial output growth in April slumped to 2.7 per cent from 6.5 per cent in the same month a year earlier and analysts said there was unlikely to be any upturn soon.

Data on Tuesday showed manufacturing sector growth, a key driver of industrial output, fell to 2.7 per cent in April from 7.1 per cent in the same year-ago period.

An acute slowdown has gripped the economy due to poor consumption and investment demand and high energy prices. A slew of data in previous months highlighted the fact that one of the world's fastest growing economies was losing pace.

"It's bad news once again. The figures just continue to reaffirm the downturn in the economy which crept in during the second half of the previous calendar year continues," Pradeep Srivastava, chief economist at the National Council of Applied Economic Research, said.

Capital goods growth fell by 1.8 per cent in April after growing 10.0 per cent a year earlier while consumer durables growth slid to 7.7 per cent after posting 16.6 per cent growth in April last year.

Analysts said the sluggish growth figures did not hold any promise of an immediate upturn.

"There's no uptick seen in industrial production and we think it is most likely that industrial production will grow just four per cent for the whole year," Sanjeet Singh, an analyst with ICICI Securities and Finance Company said.

Analysts say sluggish domestic demand and a slowing global economy coupled with expected slower exports, lack of spending on infrastructure and political uncertainty have taken its toll on industrial output growth.

The government is now desperately counting on good monsoon rains to boost demand in the rural areas where two-thirds of India's one billion population lives. Normal monsoon rains are crucial for a bumper harvest, which boosts rural incomes and stimulates consumption.

The Central Statistical Organisation which released the data said it had revised the industrial output growth figures for 2000-01 to 5.0 per cent from the earlier 4.9 per cent.

It also revised upwards the figures for March to 2.12 per cent from 1.3 per cent due to a change in the mining sector index.

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