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India's industrial output growth plunges in February

India's industrial production growth plunged to 0.6 per cent in February from 8.2 per cent in the year-ago period, shocking analysts who said the figures pointed to an acute slowdown in the economy.

India's index of industrial production growth in the year to February was 5.1 per cent compared with 6.5 per cent in the year-ago period, government data released on Thursday showed.

The country's manufacturing sector, a key driver of industrial growth, appeared to be the hardest hit with growth down at 0.6 per cent in February from 8.5 per cent in the year earlier period.

"This is a big surprise. It just proves that the industrial slowdown is very deep," B B Bhattacharya of the New Delhi-based Institute of Economic Growth, said.

This was the second successive month of slow growth. In January, industrial output growth slid to 2.8 per cent from 4.9 per cent in the year-ago period.

The infrastructure industries index, a key indicator released by the government earlier showed that growth in six major sectors -- electricity, coal, steel, petroleum, refining and cement -- shrank by an overall 1.4 per cent year-on-year in February, confirming that the country is in the grips of a broad slowdown.

Bhattacharya said he expected the slowdown to have an effect on investment demand in the country and cast its shadow over the fast-growing services sector.

He said his institute had expected industrial output growth to improve to 4-5 per cent in March, but those figures would have to be reworked.

"I doubt the government will be able to realise its GDP (gross domestic product) growth projects for this year," he added.

The government has targeted GDP growth at 6.5 per cent during the year to March 2002.

In 2000/01 (April-March), India's GDP growth is forecast to grow by six per cent, down from 6.4 per cent a year earlier.

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