MOMBAI, Oct 12: Indian industrial production growth shrank in August, data showed on Friday, confirming the sharp economic downturn and boding ill for government revenues.

The index of industrial production rose 2.2 per cent in April-August compared to a 5.6 per cent growth in the year-earlier period. The output in August was up 1.8 per cent against 2.6 per cent in July and 5.0 per cent a year ago.

Economists said the data was disappointing, and the ongoing conflict in Afghanistan as the US retaliates for last month’s suicide attacks, will undermine prospects of any reversal. The August numbers are worse than in July and are very disappointing as the intensity of the slowdown has not changed, said Sanjeet Singh, analyst at ICICI Securities and Finance Co.

Going forward, the manufacturing sector which comprises 70 per cent of overall exports is expected to show a further slowdown after the September 11, attacks, he said.

Industrial output forms a quarter of GDP, and the sluggish manufacturing sector was the biggest reason for the relatively dismal 4.4 per cent GDP expansion in the first quarter of the financial year which began on April 1.—Reuters