As many as 10 of the 22 segments, including capital goods and mining, posted negative growth as the country grapples with global slowdown and subdued domestic demand. The IIP had grown by 5.3 per cent in April 2011.
However, offering some consolation, the data for the month under review was positive, as against 3.2 per cent drop logged in March.
"I am disappointed. Industry has not yet picked up. Negative sentiments are there. We have to take steps to give positive signals," Finance Minister Pranab Mukherjee told reporters here.
The capital goods output declined by a whopping 16.3 per cent in April as against a growth of 6.6 per cent in the same month last year, clearly showing that entrepreneurs are losing appetite for new investments.
Mining output contracted by 3.1 per cent in April, as against growth of 1.6 per cent in the same month a year ago.
The slowdown in industrial production will surely weigh on the Reserve Bank to cut lending rates at its mid-quarterly review on June 18.
The IIP data is yet another bad news for the economy. Yesterday, global agency S&P put India on notice for a possible downgrade of its sovereign credit rating below the investment grade.
However, the stock market ignored both the S&P warning and dismal industrial performance amidst expectation of a rate cut by the Reserve Bank.
The BSE 30-scrip index, Sensex, was trading higher post the IIP data release. MORE
