New Delhi, May 10 (IANS): India's industrial output registered a sluggish 1 percent growth in 2012-13, the worst performance in more than two decades, due to poor show by the manufacturing and mining sectors, government data showed Friday.

The factory output, measured in terms of the Index of Industrial Production (IIP), witnessed some improvement towards the end of the year, but overall performance remained sluggish.

In March, the last month of the financial year 2012-13, the industrial output growth accelerated to 2.5 percent as compared to 0.6 percent in February, according to data released by the Central Statistics Office (CSO).

Overall growth of 1 percent registered in the financial year ended March 31, 2013, is the worst performance since 1991-92 when industrial output had grown by a mere 0.6 percent. Industrial output had grown by 2.9 percent in 2011-12.

Manufacturing, which accounts for almost three-fourths of the IIP, was the biggest drag. It has severely affected the overall economic growth. The country's gross domestic product (GDP) is expected to expand by around 5 percent in 2012-13, the worst performance in more than a decade.

Manufacturing output grew by just 1.2 percent in the financial year ended March 31.

“The current situation is reminiscent of the crisis year of 1991-92 when industrial output grew by a mere 0.6 per cent whereas manufacturing output contracted by 0.8 percent,” CRISIL Research said in an analytical note on IIP data.

“Growth of manufacturing output has remained well below its trend growth rate in the last few years with the gap from the trend only expanding with each passing year,” it said.

Chairman of Prime Minister's Economic Advisory Council C. Rangarajan said March industrial output data indicated that the situation would improve in the current financial year.

“This is a significant improvement on year-on-year. We are on the upward sphere of economic growth. The downward phase has bottomed out,” Rangarajan said.

Manufacturing production increased by 3.2 percent in March as against a deceleration of 3.6 percent in the corresponding month last year. In February, the sector registered a growth of 2.2 percent.

“The growth of 3.2 percent in manufacturing comes over a negative base and can hardly be looked as a revival in manufacturing,” said Naina Lal Kidwai, president, Federation of Indian Chambers of Commerce and Industry (FICCI).

“Overall slowdown in economic activity and consumer demand continues to constrain manufacturing growth. Also, the growth within manufacturing is highly concentrated amongst top five high growth sectors in 2012-13 thereby weakening the chances of any sustainable growth in near future in manufacturing,” Kidwai said.

The electricity sector too fared relatively better in March, with a growth of 3.5 percent in March this year as compared to 2.7 percent in March 2012.

However, mining output in March declined by 2.9 percent from a deceleration of 1.1 percent in the corresponding month last year. Mining output in February had declined by a massive 8.1 percent from an increase of 2.3 percent in the corresponding month of last year.