India's industrial output picks up in September

MUMBAI - India's industrial production picked up by 2 percent in September over the previous year, the government said yesterday. The expansion in output was a welcome sign of life for Asia's third-largest economy, which has been growing at its slowest pace in a decade.

The growth was led by a 12.9 expansion in electricity but showed an anemic manufacturing uptick of just 0.6 percent. The mining sector was up 3.3 percent.

Weak demand has been tamping down industrial output in India as inflation combined with weak growth and a falling rupee make consumers reluctant to spend.

September's Index of Industrial Production numbers were stronger than the previous month's combined expansion of just 0.6 percent.

Financial analysis firm Crisil Research interpreted the growth as a good sign for the Indian economy, saying that higher steel and cement output possibly signal a pickup in construction activity.

But it said the uptick in industrial output could be sustained only with growth that depends on clearing bureaucratic roadblocks for stalled projects in roads and mines that have weighed down expansion.

"To ensure a sustained recovery, it is now critical for the government to resolve issues plaguing the mining sector and speed up clearances of projects," Crisil said in a note to investors.