Falling industrial output numbers in Feb. due to high base effect: Analysts

According to Singh, IIP has in fact grown by 0.2 percent on month-on-month basis in February 2009 if one looks at the de-seasonalized data.

"As the impact of the measures taken by Reserve Bank of India (RBI) and the government will continue to play out over a period of time, we expect IIP growth to remain subdued till the first quarter of fiscal year 2009-10. Data available also points to some buoyancy in investment proposals in the last quarter of the previous financial year, which may provide some cushion to overall industrial production," she added.

Agrees Subir Gokarn, chief economist at CRISIL, who has attributed the decline to a high base effect due to very high growth numbers in February 2008.

According to Gokarn, the IIP numbers would remain mildly negative for some time with export-oriented sectors continuing to reel under the impact of global numbers. However, stimulus packages, particularly on the credit side, are beginning to show an impact on the economy, with some sectors like auto doing better in February this year, he said.

According to Atsi Sheth, chief economist of Reliance Equities, "the worst in terms of falling output, I think it is definitely behind us."

"February is sort of a strange month. On a month-on-month basis, February activity tends to be a little bit lower than January. You are also seeing the impact of the statistical base effect. February last year was a very strong one. So, (negative) 1.2 percent was actually expected by most people. So, the fact that it has come in around that level is a good sign to my mind," she said.