India's industrial output fell in October for the first time in more than two years as capital goods investment slumped, ramping up pressure on the central bank to ease monetary or liquidity conditions, possibly as soon as Friday.

Production at factories, mines and utilities plunged 5.1 per cent from a year earlier, far worse than expected, another blow for the embattled government of Prime Minister Manmohan Singh that is struggling to combat a slide in the economy.

"It is a lot worse than we expected. The nearly two years of monetary tightening is clearly being felt," said Tim Condon, head of Asian economic research at ING in Singapore.

"While India may not be a manufacturing-driven economy, more data prints such as this would be a worrying sign. While we expect a status quo in terms of interest rates from the RBI (Reserve Bank of India) this week, the pressure is clearly building on them to start easing," he said.

Source: The Daily Sun/ Bangladesh/ 13th Dec 2011