India industrial production beat declines

Industrial output rose more than economists estimated in January following policy changes by the government to bolster an economy expanding at the weakest pace in a decade.

Production at factories, utilities and mines climbed 2.4 percent from a year earlier after a revised 0.5 percent drop in December, the Central Statistical Office said in a statement in New Delhi today. The median of 28 estimates in a Bloomberg News survey was for a gain of 1.3 percent.

Workers inspect molding pieces for quality control at the Motherson Sumi Systems Ltd. (MSSL) injection molding plant in Noida, India.

The government in last month's budget said it will trim the fiscal deficit to a six-year low, seeking to reduce inflation risks and boost the central bank's scope to cut interest rates. Wholesale prices probably increased at the slowest pace in more than three years in February, the median estimate in a Bloomberg survey shows before a report due March 14. "Amidst expectations of a stretched and gradual demand revival, a sharp upswing in output is unlikely," Tirthankar Patnaik, a Mumbai-based strategist at Religare Capital Markets Ltd., said before the release. The central bank will probably lower borrowing costs at next week's policy meeting, he said.

Finance Minister Palaniappan Chidambaram targets a budget gap of 4.8 percent of gross domestic product in the year through March 2014, from 5.2 percent, in a bid to avert a credit-rating downgrade.

The administration has taken steps in recent months to open the economy to more foreign investment, spur exports and speed up stalled road and rail projects to revive growth. The rupee has appreciated about 2 percent against the dollar since the policy changes began in mid-September, paring its loss in the past year to 7.9 percent. The currency rose 0.2 percent to 54.285 per dollar as of 11:07 a.m. in Mumbai.