In what could put a spanner in the economic growth story, India's industrial production grew at a disappointing 4.4 per cent in September as compared to 8.2 per cent in the same month of the previous fiscal with the decline in capital goods output being the main pull-down effect.

The government figures released on Friday indicated that industrial growth was slowing down as the Index of Industrial Production (IIP) has shown a declining trend during the past two months. The UPA-II regime, which has projected a growth of 8.5 per cent this fiscal, could have a situation on its hand. A worried Finance Minister Pranab Mukherjee said it was a matter of concern and the Government would have to examine the reasons behind this fall. The negative growth also impacted the stock markets where there was a sentiment to sell.

The quick estimates of IIP, with base 1993-94, for September released by the Central Statistics Office of the Ministry of Statistics and Programme Implementation on Friday, said the general index stood at 325.6 as compared to 309.1 in the previous month.

During the first-half of the fiscal, industrial output averaged at 10.2 per cent. The IIP for 2010 was revised upwards to 6.9 per cent from the earlier 5.6 per cent. Though 14 out of the 17 industries, which constitute the IIP, posted positive growth in September, the quantum of increase was modest, as per data released by the Central Statistical Organisation (CSO).

The manufacturing sector, which constitutes a major chunk of IIP, grew at 4.5 per cent in September as compared to 11 per cent in the same month a year ago. Electricity generation too was in slump, nudging up just 1.7 per cent in the month under review as against 3.8 per cent in September 2009. The mining sector grew at a relatively faster rate of 5.2 per cent in September as compared to 8.7 per cent last year. Capital goods saw output declining by 4.2 per cent in September.

Among other sectors, intermediate goods production rose 10.3 per cent while basic goods output was up 3.5 per cent. Consumer goods recorded an overall growth of 5.2 per cent, with consumer durables logging a 10.9 per cent increase in output and consumer non-durables production rising 2.5 per cent.

“Manufacturing sector's growth is on expected lines as monetary tightening by Reserve Bank of India (RBI) was going to moderate the growth of the sector.