Indian output falls despite gov’t efforts

NEW DELHI - Agence France-Presse

A laborer works inside an iron factory on the outskirts of Jammu, India. REUTERS photo

India’s industrial output shrank by a surprise 0.4 percent in September from a year ago, data showed Monday, underscoring the government’s challenge as it seeks to jumpstart growth with a string of reforms.

The September output figure was far below market expectations of a 2.8 percent year-on-year rise and a blow to the Congress-led government which had said it believed the economy had turned the corner.
“The figures are testament to the external and structural headwinds India’s economy is still facing,” HSBC India chief economist Leif Eskesen said.

Manufacturing output, which accounts for three-quarters of the Index of Industrial Production, contracted by 1.5 percent while capital goods -- such as factory plant equipment -- plunged by 12.2 percent.

“Industrial activity remains tentative and the overall economic momentum is muted,” said Jyoti Narasimhan, economist at IHS Global Insight.