Infrastructure sector growth slowed to 3-month low of 1.1% in July as output of crude oil, natural gas and steel contracted, making a case for a further rate cut by the Reserve Bank.
The expansion in eight core sectors, which contribute about 38% to the overall industrial production, was 4.1% in July last year.
According to the data released by the Commerce and Industry Ministry on Monday, output of crude oil, natural gas and steel contracted by 0.4%, 4.4% and 2.6% respectively in July this year.
Growth in output of coal, cement and electricity slowed to 0.3%, 1.3% and 3.5% respectively last month. However, refinery products and fertiliser production grew by 2.9% and 8.6% respectively.
In March and April this year, the eight sectors had contracted by 0.1% and 0.4% respectively.
However, in May and June the infrastructure sector had expanded by 4.4% and 3%.
The slowdown in the core sector is expected to raise the clamour for further rate cut by RBI, which has already lowered the key lending rate thrice this year.
The next monetary policy review is on September 29. During the April-July period of the current fiscal, the core sector output has expanded by 2.1% as against 5.5% in the first four months of 2014-15.
The overall growth of eight core industries in the entire 2014-15 fiscal stood at 3.5% against 4.2% in the previous fiscal.