According to data released by the Central Statistics Office (CSO), manufacturing output, that constitutes nearly 76 percent of the industrial production, contracted by 0.1 percent in August year-on-year and mining production declined by 0.2 percent.
However, electricity output jumped by 7.2 percent.
The cumulative growth of the factory output, measured in terms of Index of Industrial Production (IIP) for the period April-August stood at 0.1 percent.
For the first five months of the current financial year, manufacturing output dropped by 0.1 percent, while mining production slumped by 3.4 percent.
Electricity sector has posted 4.5 percent growth in April-August period.
As per use-based classification, basic goods sector recorded 1.5 percent growth in August year-on-year and intermediate goods output increased by 3.6 percent. However, capital goods production dropped by 2 percent.
Consumer goods output dropped by 0.8 percent.
Output of consumer durables products slumped by 7.6 percent, while consumer non-durables recorded growth of 5 percent. The overall consumer goods sector posted a decline of 0.8 in output.
Economist at Angel Broking Bhupali Gursale said the industrial output data was a "huge disappointment" since markets were largely factoring in better numbers owing to the core output data and export growth.
"Healthy electricity production has supported the index excluding which the performance on a year-on-year basis would be flat," Gursale said.
D.S. Rawat, secretary general of Assocham, said: "The negative growth in critical industrial segments, especially in the festive season calls for a serious thinking by policy makers."
"The cheaper loans being announced for financing consumer goods may help revive consumer durables demand in the festive season to some extent. However, other sectors too need such boosts," Rawat said.
--IANS (Posted on 11-10-2013)