India downgrades its January industrial output figures to 1.1% yearly growth from 6.8%; in February, industrial output grew 4%, versus expected growth of 6.5%

MUMBAI, India , April 12, 2012 () – India sharply downgraded January industrial production figures Thursday and said output grew a disappointing 4.1 percent in February, adding to pressure on the central bank to cut interest rates next week.

The government said January industrial output grew just 1.1 percent over the year before, well below its initial estimate of 6.8 percent growth. February's numbers widely missed the expected 6.5 percent growth.

Manufacturing, which comprises the bulk of industrial production, grew 4.0 percent in February, about half as fast as it was growing a year earlier. Production of consumer durables fell 6.7 percent in February from the year before.

Overall capital goods production — a sign of investment activity — rose 10.6 percent, masking a sharp fall in production of machinery and equipment, which was down 9.4 percent.

Glenn Levine, senior economist at Moody's Analytics, said the numbers were "a disaster" and the revision a shock.

"India's corporate sector is struggling under the weight of weak economic growth, elevated inflation, financial volatility and an incompetent government that does nothing to inspire confidence in the country's future," he said in a report published Thursday.

"Batten down the hatches. It's going to be a tough 2012 in India."

Chandrajit Banerjee, director general of the Confederation of Indian Industries, a business lobby, urged the central bank to cut interest rates when it meets next Tuesday.

He said the economy needs all the help it can get to achieve the government forecast of 7.6 percent growth in the fiscal year through March 2013.

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