India's Manufacturing Increases 6.4%

Down from 12% last year

A sharp slowdown from 12% in the same month a year ago as manufacturing and power production weakened, India's industrial output rose 6.4% in September, official data showed on Nov. 12.

The slowdown came as the central bank held a key interest rate at a four-year high of 7.75% and hiked the cash reserves banks need to set aside by 50 basis points to 7.5% in its latest monetary policy review in October.

Finance Minister P. Chidambaram said it was too soon to draw any conclusions about a slowdown in overall economic growth from the September industrial output figure. "I don't think we can draw conclusions from one month's figures, but overall services and industry are likely to grow between nine to 10% this fiscal (year)... perhaps close to 10%."

"This means 83% of the Indian economy will grow between 9%-10%," he said. "If we can sustain this rate of growth, per capita income can double in about nine years."

Copyright Agence France-Presse, 2007

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