India’s industrial production shrank in March for the fifth time in sixth months.
Output from mines, factories and utilities contracted by 0.5 per cent year-on-year in March, according to data published on Monday as the country concluded elections.
Manufacturing output slid by 1.2 per cent, while output of capital goods, such as plant equipment – a harbinger of future investment – plunged by 12.5 per cent.
“The figures show the next government will inherit an economy with very little positive momentum,” said Capital Economics analyst Miguel Chanco.
Exit polls released late on Monday after balloting ended in the marathon election suggested the right-wing Bharatiya Janata Party (BJP) and its allies would form the next government, ousting the scandal-tainted, left-leaning Congress party.
Official results will be announced on Friday.
Even though the headline industrial output figure beat market forecasts for a 1.5 per cent contraction, the new government faces “enormous” challenges to revitalise the economy, said Deepak Lalwani, head of India-focused investment consultancy Lalcap.
The economy grew by just 4.9 per cent in the year to March 2014, according to government estimates, half the rate it notched up during India’s boom times.
The Hindu nationalist BJP, led by chief minister of thriving western Gujarat state Narendra Modi, has promised steps to counter India’s worst slowdown since the 1980s, such as fast-tracking investment approvals and improving roads and other creaking infrastructure.
But analysts see little chance of a swift turnaround as separate figures on Monday showed consumer prices rising to 8.59 per cent in April from 8.31 per cent in March year-on-year – one of the highest rates globally.