New Delhi: India’s factory output grew at its slowest pace in 17 months at 0.5% in November partly because of an unfavourable base effect as well as contraction in manufacturing activity. During the month, manufacturing production shrank 0.4%, while electricity and mining output grew 5.1% and 2.7%, respectively.
GDP data released by the Central Statistics Office earlier this month showed India’s $2.7-trillion economy headed for a slowdown in the second half of the fiscal year ending 31 March, ahead of the 2019 Lok Sabha elections due by May, with a federal statistics body projecting an overall economic growth of 7.2% for 2018-19. With the economy already recording a 7.6% GDP growth in the first half (April-September) of the current fiscal, this implies it will grow at around 6.8% in the second half (October-March).
Growth so far in 2018-19 has been driven by government spending on infrastructure. This may be a challenge to sustain as the government is likely to cut back on capital expenditure to meet the fiscal targets which stand at 112% of its full-year target in the first eight months till November.