Industrial output down 1.2% YoY in February & Inflation eases to 0.26 per cent

India's industrial output fell 1.2 per cent in February against a growth of 9.5 per cent in the like month of last fiscal, even as the provisional drop reported for January has been revised now to a marginal growth of 0.39 per cent.

As per data on index for industrial production (IIP) released on Thursday, manufacturing output, which accounts for the bulk of the weight in the overall index, declined 1.4 per cent in February, against 9.6 per cent growth in the like month of last year.

While mining output also fell 1.6 per cent, against 8 per cent growth in February 2008, that for electricity increased marginally by 0.7 per cent compared with a 9.8-per cent growth during the period under review, the official statistics showed.

Cumulatively, the general index expanded 2.8 per cent during the first 11 months of 2008-09, as against 8.8 per cent in the same period of last year. Industrial output was up 8.1 percent in 2007-08 and 11.6 per cent in the year before.

Inflation declined to 0.26 per cent, the lowest ever in more than three decades, for the week ended March 28 mainly on account of food items and mineral products, fuelling expectations of rate cuts by the Reserve Bank.

The wholesale price-based index declined by 0.05 percentage points against 0.31 per cent in the previous week.

During the week, the minerals group declined by a whopping 11.8 per cent due to prices of fire clay going down 19 per cent, iron ore 14 per cent, and chromite two per cent.

Prices of some food items like tea have declined. But the fuel index remained unchanged at its previous week's level of 320.9.

However, manufactured items like imported edible oil were dearer by six per cent, benzene by 14 per cent, and enamelled copper wires by 9 per cent.