Industrial output for the third month in a row remained in the negative territory contracting 1.5 per cent in January due to poor showing of manufacturing sector raising industry clamour for rate cut by Reserve Bank.
Factory output measured in terms of Index of Industrial Production (IIP) also declined by 3.4 per cent in November and 1.2 per cent in December according to data released by Central Statistics Office (CSO).
The index had registered a growth of 2.8 per cent in January 2015, it said. Concerned over sluggish recovery, the India Inc stepped up its demand for rate cut by the RBI at monetary policy for next fiscal to be announced on April 5.
"We hope to see further rate reduction in the forthcoming monetary policy that can stimulate demand and investments in the economy to support manufacturing growth", FICCI Secretary General A Didar Singh said. During April-January period this fiscal, industrial output growth remained flat at 2.7 compared to year ago period.
The decline in January has been primarily on account of a massive drop in output of capital goods which showed a contraction of 20.4 per cent in January compared to growth of 12.4 per cent in the same month a year ago.
The manufacturing sector, which accounts for over 75 per cent of the index, declined by 2.8 per cent against a growth of 3.4 per cent in January 2015.
However, the mining sector showed an improvement, registering a growth of 1.2 per cent in the month as against a contraction of 1.8 per cent in same month a year ago.
Power generation showed acceleration, recording a growth of 6.6 per cent as against 3.3 per cent growth in same month a year ago.
As per the used based classification, basic goods reported a marginal increase of 1.8 per cent as against a growth of 4.8 per cent in January 2015.
The consumer goods output remained stagnant as against 1.9 per cent contraction in January last fiscal. Consumer durables, however, showed growth of 5.8 per cent in January as against a contraction of 5.7 per cent during the same month last fiscal.
However, the consumer non-durable segment showed a contraction of 3.1 per cent in January as against a growth of 0.3 per cent in the corresponding month.
In terms of industries, ten out of 22 industry groups in the manufacturing sector showed negative growth during January 2016 as compared to corresponding month of the previous year.