New Delhi, April 11 :India's industrial output contracted by 1.9 percent in February against a growth of 0.8 percent in the previous month due to a sharp drop in manufacturing production, government data showed Friday.

The industrial output, measured in terms of the Index of Industrial Production (IIP), had posted a sluggish growth of 0.8 percent in January.

The contraction in February production has dampened hopes of revival in the economy.

For the first 11 months of the fiscal ended March factory output stands at 0.1 percent, according to data released by the Central Statistics Office (CSO).

Manufacturing production shrank by 3.7 percent in February. However, electricity output jumped by 11.5 percent and mining production increased by 1.4 percent year-on-year during the month under review.

In terms of industries, 13 out of the twenty two 22 industry groups in the manufacturing sector have shown negative growth in February.

“Such a steep fall in manufacturing disproves that growth has bottomed out. Both consumer demand and investment conditions seem to be weakening thereby further dampening the outlook for manufacturing,” said Arbind Prasad, director general of FICCI.

“Revival of manufacturing growth requires some bold reforms in the area of business regulatory environment which should be the focus and priority for the government,” he said.

As per use-based classification, the growth rates in February 2014 over February 2013 are 3.9 percent in basic goods and 4.2 percent in intermediate goods.

However, capital goods slumped by 17.4 percent.

The consumer durables and consumer non-durables contracted by 9.3 percent and 1.2 percent respectively, with the overall drop in consumer goods being 4.5 percent.

“Shrinkage in the production of capital goods and consumer durables shows that industrial revival is far more difficult in the present scenario,” said D. S. Rawat, secretary general of Assocham, while expressing disappointment over the monthly numbers.

"The negative growth of manufacturing has got serious implications for the overall growth, employment and trade balance,” Rawat said. (IANS)