The contracting industrial output numbers released Thursday had a dampening impact on India Inc which felt that India's macro-economic picture looked quite grim at this point of time.
India's industrial output declined by 1.8 percent during October, due to poor performance of the mining and manufacturing sector, government data showed Thursday.
Commenting on the October IIP figures, Chandrajit Banerjee, director general of industry body Confederation of Indian Industry said the negative growth in industrial performance evidenced at the threshold of the third quarter is disappointing.
"The decline in industrial production during the month casts a shadow on hopes that the economy has bottomed out and there would be a turnaround in industrial activity in the second half of this fiscal," said Banerjee.
Factory output measured in terms of the Index of Industrial Production (IIP) had grown by two percent in September.
"The de-growth in the core sector and some consumer durable segments has weighed down the industrial and manufacturing growth in October. The manufacturing growth is significantly affected by the de-growth in the mining sector as sectors like metals that are dependent on minerals and have substantive weight in the index are pulling down the growth in manufacturing," FICCI president Naina Lal Kidwai said.
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Economist Siddharth Shankar said the IIP numbers are dismal. "We may see better IIP numbers for November but beyond that I doubt if we can go for a sustained growth."
"The manufacturing and mining remain in a shambles while further disaggregation of IIP data portrays a very sorry state of affairs. Industry after industry, is showing sizeable degrowth, signalling possibility of job losses," said D.S. Rawat, Assocham secretary general.
The cumulative growth of the industrial production for the April-October period year-on-year was at a standstill from a growth of about 1.2 percent in the corresponding period of last fiscal, according to data released by the Central Statistics Office (CSO) here.
Mining output in October declined by 3.5 percent as against negative growth of 0.2 percent in the corresponding month of last year. Mining output in September had risen by 3.3 percent.
Manufacturing production registered a decline of two percent during the month under review from a gain of 9.9 percent in October 2012. In September, the sector's output grew by 0.6 percent.
The electricity sector reported an increase of 1.3 percent in October from 5.5 percent recorded in the corresponding month of last year. In September, the sector had registered a healthy increase of 12.9 percent.