On the back of rising input costs and high interest rates, the sharp decline in key sectors of coal, natural gas and fertiliser pulled down the index of eight core industries.
The index slowed down to 2.3 per cent in September from 3.3 per cent in the corresponding period last year. These sectors had registered a growth of 3.5 per cent in August 2011.
Coal was the worst performer, registering decline of 17.8 per cent in September. This could be largely attributed to the strike at Singareni Collieries that hit production and the heavy rains that inundated coal fields in Eastern India.
The sector had grown at -1.8 per cent in September 2010.
Natural gas recorded a decline of 6.4 per cent while fertiliser was down 2.1 per cent, according to Government data. These sectors had registered a positive growth of 12.6 per cent and 0.3 per cent, respectively, in September 2010.
The core industries grew by 4.9 per cent in the first half of the current fiscal, against 5.6 per cent during the corresponding period in 2010-11.
Crude oil was unimpressive with 0.1 per cent growth in September 2011 compared with 12.5 per cent in September 2010.
Cement expanded by a mere 0.9 per cent (5.2 per cent).
Steel production, too, reported a similar trend, recording a growth of 6.6 per cent in September 2011 (11.7 per cent).
The only sectors that bucked the slowing trend were electricity and refinery products. Electricity generation grew 8.9 per cent in September 2011, (2.1 per cent), despite recording a 9.4 per cent growth in August 2011.
Refinery products, too, managed a jump of 4.4 per cent from a negative 10.2 per cent growth witnessed in September 2010.