Industrial output shrinks for third straight month

India's industrial production shrunk for the third straight month in December, dragged down by weak investment and consumer demand and pointing to continued sluggishness in Asia's third largest economy.

Industrial output fell 0.6 per cent in December from a year earlier, after contracting a revised 1.3 per cent in November, data from the federal statistics ministry showed on Wednesday.

The manufacturing sector, which constitutes about 76 per cent of industrial production, contracted 1.6 per cent from a year earlier.

Capital goods production, a barometer for investments in the economy, fell an annual 3.0 per cent in December, compared with a 0.3 per cent provisional growth in the previous month.

India last week cut its estimate of annual growth for the current fiscal year ending in March to 4.9 per cent from 5 per cent because of a contraction in the manufacturing and mining sectors.

The weak output data will do little to help the Congress party-led ruling alliance, which faces an uphill battle in a general election due by May.