The data released by the government on Friday showed that output from mines, utilities, and factories grew by only 0.5 percent year-on-year, a significant drop from the 3.9 percent rise seen in June. This growth was in contrast to the 5.0 percent high seen in May. Retail inflation also decreased slightly to 7.8 percent in August from 7.96 percent the previous month, primarily due to slower price increases in fuel and clothing. Despite the recent economic growth, high inflation could pose challenges for Prime Minister Narendra Modi in encouraging consumer spending and may prevent the Reserve Bank of India from lowering interest rates in the upcoming review. Economists predict that interest rates will remain unchanged for the rest of the fiscal year, with a possible adjustment next year. The prospect of rising inflation, driven by increased demand and potential interest rate hikes in the US, may also influence the central bank's decisions. Modi's promise to boost the economy, control inflation, and create jobs has attracted foreign investment, but sustaining this positive momentum will require addressing issues such as public finances, land acquisition laws, tax regulations, and labor policies. Failure to implement necessary reforms could hinder economic growth, especially as consumer spending and business investment remain weak. In July, there was a 7.4 percent annual decrease in production, with firms being hesitant to make new investments. Capital goods production also dropped by 3.8 percent from the previous year. Rohini Malkani, an analyst at Citi, stated that while the government has improved the investment climate and confidence, more actions are needed to return to a period of strong growth and low inflation. Photos from Reuters show workers inside a boiler spare parts manufacturing workshop in Kolkata on June 11, 2014, and inside a steel factory on the outskirts of Jammu on January 2, 2014.