A sharp decline from a revised 15.2% surge the previous month, industrial output rose just 5.6% year-on-year in August, official data showed on Oct. 12.
The figure was well below economists' forecasts of a 9.9% expansion in output and the 10.6% growth posted in August last year.
Manufacturing, which has an 80% weight in the industrial output index, grew 5.9%, compared with 10.6% in August 2009.
Moderate 3.7% growth in core sectors, which include crude oil, coal, electricity, cement and finished steel and account for 26.7% of total industrial output, was also seen as dampening factory output in August.
Finance Minister Pranab Mukherjee has said he expects average industrial growth in the current fiscal year to March 2011 to be between 12% and 13% thanks to the labor-intensive manufacturing sector "doing well."
Industrial growth for the first five months of this fiscal year stood at 10.6% in comparison to 5.9% in the same period a year earlier.
Several analysts said the unexpected surge in July had been an aberration and pointed to a traditional slowdown in industrial output during the monsoon season, which was extended this year.
"From the second half of 2010, we are seeing some signs of moderation in industrial activity and signs of weaker global demand and supply-side pressures," said Nomura economist Sonal Varma.
Analysts said a slower growth rate was not worrisome and India's economy could see sustainable growth in coming months.
Copyright Agence France-Presse, 2010