NEW DELHI (Commodity Online) : Asia’s third largest economy, India’s industrial output grew only by a modest rate of 1.6 percent last December compared with same period last year.

According to an official data, the index of industrial production, the barometer of the output of various sectors like manufacturing, stood at 8.6 percent for the April-December period of the current fiscal, according to data released by the Planning Commission here.

Industrial output grew by 18.6 percent in December 2009, although it was in comparison to a lower base.

Industrial output in November, earlier registered at 2.7 percent, was revised upwards to 3.62 percent, the data showed.

Manufacturing output, which constitutes a majority of the IIP rose by 1 percent in December, while mining and electricity sectors grew by 3.8 percent and 6 percent, respectively.

During the month, capital goods and consumer non-durable goods showed the most negative growth. Important items registering high negative growth included computer system and peripherals (-52.2 percent), and agricultural implements (-49.6 percent).

Twelve out of the seventeen industry groups have shown positive growth during the month of December.

The Reserve Bank of India had last month hiked key interest rates to combat high inflation and hinted at further tightening in the future. This could, however, have a dampening effect on industry as credit would get costlier.

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