The growth has hit the lowest level in the last 81 months. This is the first contraction after June 2017.
The growth rate of August factory output was lower than the 4.8 per cent achieved during the corresponding month of the previous fiscal.
"The Quick Estimates of Index of Industrial Production (IIP) with base 2011-12 for the month of August 2019 stands at 126.6, which is 1.1 per cent lower as compared to the level in the month of August 2018," the Ministry of Statistics and Programme Implementation said.
"The cumulative growth for the period April-August 2019 over the corresponding period of the previous year stands at 2.4 per cent," it added.
As per the data, the output rate of the manufacturing sector fell (-)1.2 per cent in August from a year-on-year (YoY) rise of 5.2 per cent.
On a YoY basis, mining production inched up by just 0.1 per cent from a negative growth of (-)0.6 per cent and the sub-index of electricity generation was lower by (-)0.9 per cent from 7.6 per cent.
"IIP growth has been the lowest in the last 81 months and saw the first contraction after June 2017. It appears that pre-stocking due to festive demand in September and October has not taken place," said Devendra Kumar Pant, Chief Economist at India Ratings & Research.
"Going forward, the IIP is likely to show erratic low growth trend. The policy measures announced by the government after the first quarter GDP growth of 5 per cent are more supply side interventions and are unlikely to boost demand. With no fiscal space available to the government, it is unlikely that the demand is going to return back soon," Pant said.
( With inputs from IANS )