India's industrial production in August grew at a much slower rate of 5.6 per cent compared to the revised figures of 15.2 per cent in the previous month, with a decline in capital goods output adding to the base effect, according to official data released on Tuesday.
August's index of industrial production (IIP) numbers was also lower than the 10.6 per cent increase seen in the like month of 2009.
During this fiscal, for April-August, industrial output averaged at 10.6 per cent against 5.9 per cent in the like period of previous fiscal.
Though 14 out of the 17 industries, which constitute the IIP, posted positive growth in August, the quantum of increase was modest, as per data released by the Central Statistical Organisation (CSO).
The manufacturing sector, which constitutes a major chunk of the IIP, grew at 5.9 per cent in August compared to 10.6 per cent in the same month an year-ago.
Electricity generation too was in slump, nudging up just 1 per cent in the month under review as against 10.6 per cent in August 2009.
The mining sector grew at a relatively faster rate of 7 per cent in August, compared to 11 per cent last year.
Capital goods, which was the fastest growing sector in July, saw output declining by 2.6 per cent in August.
Among other sectors, intermediate goods production rose 10 per cent while basic goods output was up 3.7 per cent.
Experts earlier had said the industry could grow in single-digit for July because of the base effect, but the numbers came much lower than expected.
As a result, the 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange dipped more than 232 points or over a per cent to 20,107.25 points around noon on Tuesday.