By Shivangi Acharya and Sarita Chaganti Singh
NEW DELHI (Reuters) -India's industrial output rose 5.8% year-on-year in September, government data showed on Friday, lagging expectations on slower electricity and manufacturing growth, but economist remain optimistic on festive demand.
Analysts in a Reuters poll had forecast an expansion of 7%. In August, output rose 10.3%.
Industrial output growth nearly halved on month due to excess rainfall and delayed festivities in India, Aditi Nayar, economist at ICRA said. India's months long festive season peaks during Diwali, the festival of lights, which will be celebrated on Nov. 12.
Manufacturing output in September rose 4.5% year-on-year, electricity generation was up 9.9% and mining activities increased 11.5%, the data showed.
Infrastructure goods and capital goods grew 7.5% and 7.4%, respectively. Consumer goods output rose 1% in September, against a contraction in the similar period a year ago.
Performance of most macro indicators has improved in October over September this year, Nayar said, adding "ICRA expects on year IIP growth to improve to 7-10% next month."
Industrial output in the first six months of the fiscal year that started in April was up 6% from the same period a year ago.