The data also expose the challenges to the Narendra Modi government which recently celebrated its two years in office with much fanfare

India's industrial output unexpectedly shrank 0.8 percent in April from a year earlier, its first contraction in three months, government data showed on Friday, raising concerns of a delayed recovery of the economy.

The data also expose the challenges to the Narendra Modi government which recently celebrated its two years in office with much fanfare.

Economists surveyed by Reuters had forecast a 0.5 percent growth in output compared with a revised 0.3 percent year-on-year rise in March.

According to the data, the slowdown in capital goods production, a key metrics for capital expenditure, deepened as it declined a whopping 24.9 percent during the month, compared with a 15.3 percent contraction in March. In April 2015, the output had registered a growth of 5.5 percent. This is the sixth consecutive month of decline in the sector.

“The story of uneven industrial growth continues as IIP registers contraction in April on the back of another slide in capital goods production,” Rishi Shah, economist at Deloitte said in a note. “Overall, a near term recovery in the industrial sector looks difficult and growth will remain crucially dependent on how demand shapes up in the period after the monsoons,” said Shah.

Another sector that has witnessed a decline is consumer non-durables - (-)9.7 percent, compared with a decline of (-)5 percent in March.

The manufacturing sector too witnessed a steeper decline of (-)3.1 percent as against (-)1 percent in March. In April 2015, the sector had witnessed a growth of 3.9 percent.

The sectors that did well are electricity, which grew 14.6 percent (11.8 percent in March) and consumer durables 11.8 percent (9.9 percent).

In terms of industries, nine out of the 22 industry groups (as per 2-digit NIC-2004) in the manufacturing sector have shown negative growth during April, said the press release. Electrical machinery & apparatus n.e.c. has shown the steepest decline of (-)55.9 percent, followed by (-)24.5 percent in food products and beverages and (-)17.6 percent in Tobacco products.

Furniture manufacturing has shown the highest positive growth of 28.0 percent followed by 18.8 percent in Radio, TV and communication equipment & apparatus and 18.7 percent in Office, accounting & computing machinery.

There are already signs that the slowdown is likely to extend into May as earlier this month, Nikkei/Markit data showed that manufacturing output in the country grew at its slowest pace in five months in May, suggesting that the sector is “barely improving”.

The composite indicator of the manufacturing sector performance, stood at 50.7 in May as against 50.5 in April - one of its lowest readings since the end of 2013.

A reading above 50 represents expansion while one below this level means contraction.

“Signs of challenging economic conditions in the Indian manufacturing sector were evident in May, with output losing further growth momentum. The headline PMI remained in expansion territory, but recorded one of its lowest readings since the end of 2013, suggesting that the sector is barely improving,” said Pollyanna De Lima, economist at Markit and author of the report.

With agencies