India's industrial output rose 2.7 per cent in January from a year earlier, government data showed on Friday.
The industrial output's slower growth now keeps strong hopes alive for a RBI rate cut in coming months. During April-January, the IIP was up just 0.6% as against 2.7% a year ago.
According to the government data, manufacturing output grew 2.3 per cent in December, electricity was up 3.9 per cent and mining was 5.3 per cent.
While, the capital goods output was up 10.7 per cent as against 21.6 per cent fall in the same month last year. The Consumer goods output was lowered to 1 per cent with durables growing 2.9 per cent and non-durables falling 3.2 per cent.
Earlier on February 28, the CSO retained the growth projection for the current fiscal at 7.1 per cent.
Modi's decision last November to outlaw old 500 rupee and 1,000 rupee banknotes was widely expected to exact a heavy toll on an economy where most people are paid in cash and buy what they need with cash.
In its February monetary policy review, the Reserve Bank of India (RBI) kept its repo rate unchanged at 6.25 per cent against a widely-anticipated cut of 25 basis points.
The Central Bank expected the inflation to firm up due to the quick pace of remonetisation.