Manufacturing sector, which constitutes over 77 percent of the index, showed a growth of 3.1 percent in August as compared to a growth of 5.5 percent in the same month a year ago.
The output of mining and electricity sectors during the month accelerated to 9.4 percent and 8.3 percent from (-) 4.3 percent and 2.1 percent respectively in August past year.
India's industrial production growth hit a nine-month high of 4.3% in August, according to data published by the Central Statistical Organisation (CSO) on October 12.
Prices of food products went up last month 0.54 pct, similar to those of non-food products while service tariffs increased 0.32 pct.
Economists surveyed by Reuters had forecast 2.4% growth in output compared with a revised 0.9% year-on-year increase in July.
The industry group "Manufacture of computer, electronic and optical products" showed the highest positive growth of 24.9 percent, followed by 16.5 per cent in "pharmaceuticals, medicinal chemical and botanical productsÂ" and 11.1 per cent in "other transport equipmentÂ". Similarly, consumer non-durables grew almost 7 percent, which contracted (-) 0.1 percent in July.
Meanwhile, retail inflation recorded at 3.28 percent in September. The consumer price index (CPI) based inflation stood at 4.39 percent during the same month past year. Inflation not easing further dampens hopes of India Inc for interest rate cuts. A Reuters poll showed that economists expected consumer inflation to rise to 3.60 per cent in September. The current inflation rate remains below the Reserve Bank's 4 per cent target.