Industrial production growth rate slowed down sharply to 0.1 per cent in April due to contraction in capital goods and dip in manufacturing output, reflecting the sluggish state of the economy that may prompt RBI to cut lending rates.

Growth in factory output, as measured by the Index of Industrial Production (IIP), was 5.3 per cent in April last year.

The manufacturing sector, which constitutes over 75 per cent of the index, grew barely 0.1 per cent, as against 5.7 per cent in April 2011, according to the official data released on Tuesday.

The capital goods output declined by 16.3 per cent as against a growth of 6.6 per cent in the same month last year.

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 is likely to put pressure on the Reserve Bank to cut lending rates at its mid-quarterly review on June 18.

However, consumer goods production showed a faster growth rate of 5.2 per cent in April, compared to 3.2 per cent in the same month last year.

The consumer durables segment also expanded by 5 per cent in April, as against 1.6 per cent in the same month last year.

Power generation witnessed a slower growth of 4.6 per cent during April, compared to 6.5 per cent in the same month a year ago. In all, 12 of the 22 industry groups in the manufacturing sector have shown positive growth during April as compared to the same month a year ago.

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