NEW DELHI: The Indian economy got walloped coming and going, renewing apprehensions about the prospects for economic revival and likely making things difficult for the new government that will be formed after the election. While domestic demand shows no signs of picking up, the global economy is not providing enough support, two key sets of data released on Friday showed, calling into question expectations of a recovery in the new fiscal after two consecutive years of below 5% growth.The Index of Industrial Production (IIP) contracted 1.9% in February, the Central Statistical Office (CSO) said on Friday, plunging to a nine-month low and coming in well below expectations of about 0.5% growth. However, the January figure was revised to 0.76% from 0.1% estimated initially.Separately, the commerce and industry ministry said exports contracted for the second month running, declining 3.15% in March, while imports contracted at a slower 2.11%. The trade deficit ballooned to a five-month high of $10.5 billion for the month as a result.The core sector’s 4.5% growth and alow base of 0.6% growth in February last year had raised hopes of better industrial growth. The core sector has a 38% weight in IIP. “The economy remains dismal at this point in time. IIP turned out to be very disappointing as it was hoped that the high core sector growth will translate into a positive industrial growth,” said Madan Sabnavis, chief economist, CARE Ratings. “Both capital and consumer goods sectors have performed badly, and industry continues to remain stagnated. Once we have the new government in place by May, we can expect a recovery only by the second quarter of the current fiscal.”The numbers are a big setback to the hopes of a recovery in the current financial year.IMF expects the Indian economy to expand 5.4% in 2014-15, a small recovery from 4.9% the CSO has forecast for the current financial year. Fitch expects GDP growth to rise from 4.7% in FY14 to 5.5% in FY15 and 6.0% in FY16.“The prospects of a revival in the fourth quarter did not turn out true. Manufacturing continues to face two problems--bad investment climate and muted consumer demand,” said DK Joshi, chief economist, Crisil Weak consumer demand and lack of investment shows the recovery may be more difficult than generally believed. Production of consumer durables, a measure of discretionary chief economist, Crisilconsumer demand, contracted 9.3% in February. Capital goods output, a measure of investments, fell 17.4% in the month.Production of consumer non-durables fell for the first time since December 2012, declining 1.2% in February and indicating the fragile consumer confidence because of high inflation and slowdown.“The surprise fall in non-durables and sharp decline in capital goods segment indicate that revival in the industrial sector would be much longer than earlier anticipated,” Arun Singh, senior economist, Dun & Bradstreet India, said in a note.Overall manufacturing, which makes up over three-fourths of IIP, contracted 3.7% in February. Electricity generation was up 11.5% while mining was steady at 1.4%. Thirteen out of 22 manufacturing sub groups contracted in February, indicating the broad-based stress in the sector.“Both consumer demand and investment conditions seem to be weakening, thereby further dampening the outlook for manufacturing,” industry grouping Ficci said, urging bold reforms in the business regulatory environment. CII called on the Reserve Bank of India to cut interest rates. “At this moment, waiting for the next monetary policy review might not be required. The present time is propitious as inflation is low and might mandate a tilt towards growth by the central bank,” the business chamber said in a statement.Hopes have now shifted to the next government rolling out measures to improve sentiment. “Assuming that ongoing election earns a sufficiently clear mandate and reforms gain traction in H2-2014, we expect industrial production growth rate to improve at around 3% in 2014-15, compared to estimated 0.0 to -0.5% in 2013-14”, said Shubhada Rao, chief economist, Yes Bank