Analysts polled by Reuters had expected an annual output growth of 3.5 per cent for the month.
Capital goods production, a barometer for investments in the economy, contracted by 2 per cent in August.
It hopes to attract billions of dollars in investment by this move, and may ease some restrictions on foreign inflows.
.jpg)
Imports of gold virtually stopped since July 22 after confusion on the new import rules.
Mayaram also said as of now, a shutdown of the US government is not likely to have a major impact on the Indian economy.
Arvind Mayaram, economic affairs secretary at the finance ministry, also said that a fall in bulk diesel demand this fiscal year will save the government about $1 billion.
Foreign direct investment inflows into India rose an annual 12.9 percent in July to $1.66 billion.
.jpg)
Food prices for consumers also eased to an annual 11.06 percent in August from 11.24 per cent in July.
On Tuesday, the partially convertible rupee, the worst performing currency among the major global economies, dropped as much as 3.1 percent to 68.12 per dollar.
India's fiscal deficit during the 2012/13 fiscal year ending March fell to 4.9 per cent of the country's gross domestic product, compared with 5.8 percent a year ago.
Investor confidence has evaporated amid fears over the rising cost of funding India's gaping current account deficit, prompting New Delhi to delay plans to raise much-needed funds through partial privatisations, finance ministry sources said.
.jpg)
Chidambaram, speaking to reporters, also said the fundamentals of the Indian economy had not changed and asked investors to wait for the April-June quarter growth numbers due at the end of the month.
Net tax receipts for the first three months of 2013 touched Rs 1.02 trillion.
Government sources say India could consider raising the policy repo rate if the rupee falls towards 61-62 to the dollar.
.jpg)
India has in recent months stepped up enforcement of tax collections as it looks to raise revenue to help plug its widening fiscal deficit.
The Reserve Bank of India announced measures late on Monday to curb the rupee's decline by tightening liquidity.
The bank is due to review the monetary policy on July 30.
Media has raised the issues that new pricing to benefit Reliance Industries.
India's gold imports could pick up in the next few months after slumping 81 percent in June as falling prices spur buying, a government source said, adding to New Delhi's anxiety over a record-low rupee and a wide current account deficit.
India sharpened measures to curb imports of the yellow metal by hiking the import duty and restricting consignment imports, after shipments jumped to more than 300 tonnes in April and May.
© 2026 Rediff.com - Investor Information - Advertise with us - Disclaimer - Privacy Policy - Sitemap - Feedback - About us - Terms of use - Grievances