Industrial production declined by 0.5 per cent in January 2009, the contraction being for the second month in a row, in spite of stimulus packages announced by the government to ward off the impact of global recession.

Industrial output grew by 6.2 per cent in the same month a year ago.

This is the third time in this fiscal that industrial growth has turned negative.

The slide in industrial production was led by manufacturing, which fell by 0.8 per cent, followed by mining output, which declined by 0.4 per cent.

However, electricity generation was up 1.8 per cent in January.

For the first 10 months of this fiscal, industrial growth stood at 3 per cent, which might make the official projection of overall economic growth of 7.1 per cent for 2008-09 quite difficult.

The official projection pegged industrial growth to be 4.8 per cent for 2008-09.

The fall in industrial production in December was not as steep as initial estimates showed last month. The revised figures show that production contracted by 0.63 per cent against the earlier estimate of 2 per cent.

This gives some hope for January figures too getting better.

"Given the last three-four months' trends, it (January figures) could result in upward (movements) after revised estimates come," Sen said.

In terms of specific industries, 12 out of 17 sectors showed decline in growth in January.

The highest fall in production, 16.1 per cent, was witnessed in food products, followed by wood and wood products (15.2 per cent) and transport equipment and parts (13.4 per cent).

Among those that showed positive growth, the production of machinery and equipment other than transport was up 17.5 per cent.

With fiscal packages failing to propel industry, economists are not sure whether only the RBI's measures to ease liquidity will push up demand as there is a model code of conduct for the government restricting the announcement of any more such measures.

The fall in industrial production in December was not as steep as initial estimates showed last month. The revised figures show that production contracted by 0.63 per cent against the earlier estimate of 2 per cent.

This gives some hope for January figures too getting better.

"Given the last three-four months' trends, it (January figures) could result in upward (movements) after revised estimates come," Sen said.

In terms of specific industries, 12 out of 17 sectors showed decline in growth in January.

The highest fall in production, 16.1 per cent, was witnessed in food products, followed by wood and wood products (15.2 per cent) and transport equipment and parts (13.4 per cent).

Among those that showed positive growth, the production of machinery and equipment other than transport was up 17.5 per cent.

With fiscal packages failing to propel industry, economists are not sure whether only the RBI's measures to ease liquidity will push up demand as there is a model code of conduct for the Government restricting the announcement of any more such measures.