Retail or consumer inflation rose at lower-than-expected 3.28 per cent in September, unchanged from August.
Manufacturing sector, which constitutes over 77 percent of the index, showed a growth of 3.1 percent in August as compared to a growth of 5.5 percent in the same month a year ago.
Data on inflation and industrial production growth was released by the Central Statistics Office.
This was higher than the 4 per cent growth recorded in same month last fiscal.
Prices of food products went up last month 0.54 pct, similar to those of non-food products while service tariffs increased 0.32 pct.
The government today revised July's factory output growth to 0.9 percent in July, as compared with an earlier estimate of 1.2 percent.
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Factory output measured by the index of industrial production (IIP) is the closest approximation for measuring economic activity in the country's business landscape.
The latest print is lower than 4.39 per cent recorded in September past year.
As per use-based classification, the growth rates in August 2017 over August 2016 are 7.1 per cent in primary goods, 5.4 per cent in capital goods, (-) 0.2 per cent in intermediate goods and 2.5 per cent in infrastructure/ construction goods.
Underlying inflation also remained stable at 2.3 percent September.
It is a twin bonanza for the economy as the Consumer Price Index (CPI) for September has gone down and the industrial production for July has made a remarkable growth defying slowdown from the previous month.
Retail inflation has been steadily rising since June, when it eased to 1.46 percent - its slowest pace since India started releasing such figures in January 2012, based on combined data for rural and urban consumers.