In a fresh setback to overall economic growth, industrial production in the country declined by 4.2 per cent in October, the sharpest year-on-year slide in three years, also providing fresh ammo for businesses to demand lower interest rates.
The general index of industrial production (IIP) stood 4.2 per cent lower compared to the level in October 2013, quick estimates provided by the Central Statistics Office (CSO) showed.
Industrial production growth in October 2014 was the lowest since October 2011 when it had contracted by 4.74 per cent.
IIP had declined by 1.2 per cent in October last year.
For September, the CSO had revised it to 2.8 per cent from the provisional estimates of 2.5 per cent released last month, official data showed.
The cumulative growth for the period April-October 2014-15 over the corresponding period of the previous year stood at 1.9 per cent, while it was 0.2 per cent in same period of last fiscal.
With retail inflation also dipping to 4.3 per cent, industry and business associations have raised the bogey of deflation that could mar the possibilities of an economic turnaround.
This has put further pressure on the Reserve Bank of India to relax interest rates and spur economic activity like housing construction and auto sales and the stock market in particular.
Manufacturing output, which constitutes over 75 per cent of the index, contracted by 7.6 per cent in October, compared to a dip of 1.3 per cent in same month last fiscal.
For April-October, the sector saw an output growth of 0.7 per cent, compared to a contraction 0.1 per cent in the year-ago period.
The production of capital goods, a barometer of demand, declined by 2.3 per cent in October, as against a growth of 2.5 per cent in same month of last year.
For the April-October period, capital goods output was up 4.8 per cent, as against a dip of 0.2 per cent a year ago.
Sixteen out of the 22 industry groups in the manufacturing sector have shown negative growth during October 2014 compared to the corresponding month of the previous year.
Basic goods industries recorded a growth of 5.8 per cent year-on-year in October 2014 while capital goods and intermediate goods registered negative growth rates of (-) 2.3 per cent and (-) 3.1 per cent, respectively.
Production of consumer durables and consumer non-durables registered growth rates of (-) 35.2 per cent and (-) 4.3 per cent, respectively, with the overall growth in consumer goods being (-) 18.6 per cent.