According to data released by the Central Statistical Office (CSO), the index of industrial production (IIP) logged a negative 0.1 percent growth year-on-year in November 2012.
In the corresponding month of 2011, this had registered a growth of 6 percent.
The IIP had logged an 8.2 percent growth in October, led by a rebound in manufacturing, power and higher output of capital as well as consumer goods.
The cumulative growth of the core industries during April-November 2012-13 was 1 percent as compared to 3.8 percent growth registered during the corresponding period of the previous fiscal.
The contraction in industrial output is expected to have a bearing on the Reserve Bank of India (RBI), which is to decide upon key lending rates later this month.
The RBI had kept key policy rates unchanged in its meeting Dec 18, 2012, but had hinted at cutting rates in January, saying the focus of the monetary policy would now shift to spurring growth as inflationary pressures are easing.
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Inflation data for December is expected soon.
The November data showed a decline to a 10-month low of 7.24 percent against 7.45 percent.
But the wholesale price-based food inflation increased to 8.50 percent in November from 8.32 percent recorded in the corresponding month of 2011, thus remaining a major concern for the RBI.
Planning Commission Deputy Chairman Montek Singh Ahluwalia said the decline in industrial output in November was due to statistical reasons and that the government's reforms will help in speedy recovery.
"This data does not contradict the proposition that the economy has bottomed out. It now needs to move upwards...you need to wait to see what December is like," Ahluwalia told reporters here.
"In this particular case, we have to keep in mind that the base effect has operated in two different ways. This (data) is not a matter of surprise."
The manufacturing sector's output in November marginally increased by 0.3 percent during the month under review as compared to 6.6 percent registered during the corresponding month of 2011.
The cumulative figures about the manufacturing industry showed an increase of 1 percent in April-November 2012, as compared to 4.2 percent growth registered in the same period last fiscal.
The mining sector registered a negative growth. The sector, which has 10.32 percent weight in the IIP, registered a decline of 5.5 percent in November this year as compared to 3.5 percent decline in the corresponding month of the previous year.
The electricity sector, however, grew by only 2.4 percent compared to 14.6 percent increase during the year-ago period.
Segment-wise, high negative growth was reported in newspapers (-22.7 percent), furnace oil (-28.00 percent), PVC pipes and tubes (-33.1 percent), grinding wheels (-43.7 percent), air conditioners (-36.6 percent), tractors (-20.5 percent), drilling equipment (-57.7 percent), plastic machinery (-40.4 percent) and commercial vehicles (-28.3 percent).
Growth in segment-wise was witnessed in rice (21.3 percent), cotton yarn (21.9 percent), antibiotics (28.4 percent), carbon steel (18.8 percent), stainless/ alloy steel (19.7 percent) and telephone instruments including mobile phones and accessories (18.1 percent).