India February industrial output slides by unexpected 1.9pc

NEW DELHI, Apr 12 (AFP): India's industrial production slid by an unexpected 1.9 per cent in February, data showed Friday, underscoring the the huge economic revival challenge facing the new government that emerges from elections now under way.
The tumble in output in February from India's mines, factories and utilities from the same month a year earlier surprised analysts, who had expected a 0.9 perc ent rise.
Manufacturing output, accounting for over three-quarters of the Index of Industrial Production, slid by 3.7 per cent in February. Output of capital goods, such as plant equipment-a strong harbinger of investment intentions-plunged 17.4 perc ent.
"There is little on the horizon likely to lift demand or production," said Moody's Analytics analyst Glenn Levine.
But he held out hope that when a new government takes charge it could announce "fresh policies to boost" Asia's third-largest economy.
Despite weak data, investors have been racing to put their money in India amid hopes voters will elect the Hindu nationalist Bharatiya Janata Party (BJP), which has been leading in opinion polls and is perceived as more investor-friendly than the left-leaning Congress.
The BJP, whose prime ministerial candidate Narendra Modi is chief minister of prosperous Gujarat state, has promised in its manifesto to restore confidence in the "India story domestically as well as internationally".
Growth in January's output was revised upward to 0.9 per cent from 0.1 per cent.
Global ratings agency Fitch in a separate statement upheld India's prized investment credit rating but added the economy had lost "much of its dynamism".
The economy's stumbling has disappointed Congress, whose last term was marred by corruption scandals, high inflation, elevated interest rates and slowing growth.
It had hoped "green shoots" of recovery would be visible before election voting began earlier in the week.
Modi, 63, viewed as controversial because of his government's failure to swiftly subdue deadly anti-Muslim riots in 2002 in Gujarat, insists only he can turn India back into an investment magnet.
Congress has been campaigning on the record of its welfare programmes-from subsidised food to guaranteed work --- and has said it will legally entrench the poor's right to health care and housing.
The government has estimated the economy grew by 4.9 per cent in the financial year which ended March 31, but many economists expect expansion to be in the low four-percent range.
The economy expanded by 4.5 per cent the previous year, just half the blistering rate recorded in the so-called "Indian summer" of earlier years.
Voting in India's mammoth five-week election ends May 12 with results due four days later.
In other grim tidings, India's trade deficit widened to a five-month peak of $10.5 billion in March from $8.1 billion in February while exports fell for a second consecutive month.
India's central bank has kept interest rates high to fight crippling consumer price inflation of 8.1 per cent.