New Delhi: Disappointed with the factory output growth of 4.1 percent in August, Finance Minister Pranab Mukherjee on Wednesday said it may impact India's second (July-September) quarter GDP.

"It (IIP) is not encouraging. It is a bit disappointing and it may affect the GDP of second quarter," he told reporters here.

The factory output, as measured by the Index of Industrial production (IIP), was 4.1 percent in August, lower than 4.5 percent in the same month last year.

Mukherjee, however, declined to comment on the extent to which the subdued IIP numbers will impact the economic growth during the July-September quarter (Q2) of this fiscal.

"To what extent it (slowdown in IIP) would affect, it would be premature to make any assessment," Mukherjee added.

India's economic growth fell to 18-month low at 7.7 percent in the April-June period (Q1). The government expects the country to grow by around 8.5 percent during 2011-12.

As per the official data released today, the IIP growth during the April-August is 5.6 percent, as against 8.7 percent in the corresponding period of 2010-11.

However, July IIP growth has been revised upwards from 3.3 percent to 3.8 percent.

Industrial growth slows to 4.1 percent

The industrial growth of the country slowed to 4.1 percent in August on account of the poor performance of the manufacturing sector and a decline in mining output, indicating an economic slowdown.

Growth in factory output, as measured in terms of the Index of Industrial Production (IIP), stood at 4.5 percent in August last year.

During the April-August period this fiscal, IIP growth stood at 5.6 percent, as against 8.7 percent in the same period last year.

Meanwhile, the IIP growth figure for July this year has been revised upward to 3.8 percent from the provisional estimate of 3.3 percent.

The output of the manufacturing sector, which constitutes over 75 percent of the index, grew by only 4.5 percent in August, compared to 4.7 percent expansion in the same month last year, according to official data released on Wednesday.

Mining output declined by 3.4 percent in August this year, as against a growth of 5.9 percent in the same month last year.

Growth in capital goods output slowed to 3.9 percent in August, in comparison to a growth of 4.7 percent in the same month of 2010.

Growth in production of intermediate goods slowed to 1.3 percent during the month under review, as against a growth of 5.8 percent in August, 2010.

Consumer durables output grew by 4.6 percent in August, compared to a growth of 8.1 percent in the corresponding month last year.

However, electricity production improved, witnessing growth of 9.5 percent in August this year, as against mere growth of a mere 1 percent in August, 2010.

(Agencies)