Hopes of early economic revival were belied with key data released on the eve of Diwali showing contraction in industrial production, continued decline in exports and rise in retail inflation.
Besides, the much-talked spectrum auction received a lukewarm response from telecom operators, casting doubts whether the government will be able to realise Rs 40,000 crore as targeted from sale of radio waves.
After raising hopes of revival in August, the industrial production contracted again, shrinking by 0.4 per cent in September due to dismal show by the manufacturing sector.
The factory output, as measured by Index of Industrial Production (IIP), declined by 0.4 per cent as against an uptick of 2.3 per cent in August.
Exports remained in the negative territory, declining by 1.63 per cent in October pushing the monthly trade deficit to all time high USD 21 billion.
On the price front, there was no respite to the common man from rising inflation that is driven by high cost of food items such as sugar, pulses, vegetables as well as clothings.
The retail inflation moved closer to the double digit mark at 9.75 per cent in October, even as India Inc pressed for interest rate cut to revive growth.
The economic growth rate slipped to nine-year low of 6.5 per cent in 2011-12. It was 5.5 per cent in the first quarter of the current fiscal prompting RBI to lower the growth projection for 2012-13 to 5.8 per cent.
Terming the decline in industrial output in September as "very disappointing", Planning Commission Deputy Chairman Montek Singh Ahluwalia said the impact of recent reforms initiatives will manifest in the data for the second half of the fiscal.
According to the Commerce Ministry data, October exports declined by 1.63 per cent to USD 23.2 billion, although the decline in overseas shipments was slight compared to the previous month.
While the exports shrunk, the imports expanded by 7.37 per cent to USD 44.2 billion last month, highest in 18 months, leaving a trade deficit of USD 20.96 billion. Prior to this, the highest monthly import was USD 45.2 billion in May 2011.
Commerce Secretary S R Rao said the ongoing review of the export performance is likely to be completed in a couple of days and after that government may announce some support to exporters to prop up the overseas shipments.
Amid dismal economic data, industry chamber CII has stepped up its demand for 0.5 per cent cut in interest rate by the RBI saying "a complete sacrifice of growth is not in the interest of the economy".
RBI has refrained from cutting interest rate fearing it could fuel inflation. The central bank is scheduled to come out with its next mid-quarter policy on December 18.
As per the IIP data, the output of manufacturing sector, which constitutes over 75 per cent of the index, contracted by 1.5 per cent in September as against a growth of 3.1 per cent in the same month last year.
Meanwhile, the keenly watched auction of telecom spectrum which started this morning got a lukewarm response with no company bidding for pan-India radiowaves as demand concentration was on select areas such as Gujarat and Uttar Pradesh (East).
While Bharti Airtel, Vodafone, Idea Cellular, Telenor and Videocon are bidding for GSM, there are no bidders for the CDMA spectrum after Tata Teleservcies and Videocon pulled out of the race.