Showing signs of economic recovery, industry grew 2.7 per cent in May though the growth is much lower than the 4.4 per cent recorded in the corresponding month last year.
Manufacturing sector output during May rose by 2.5 per cent, while the mining sector and power generation grew 3.7 per cent and 3.3 per cent, respectively.
Industrial growth during April, the first month of the current fiscal, was 1.2 per cent, according to the industrial production data released by the government today.
The cumulative growth rate during April-May works out to 1.9 per cent, down from 5.3 per cent during the corresponding period last fiscal.
According to the use-based classification of IIP, the capital goods industry continues to record negative growth, dipping by 3.6 per cent during the month.
The consumer durables sector, which include refrigerators, television etc., posted a high growth rate of 12.4 per cent against 2.8 per cent in May 2008, reflecting a pick-up in demand.
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Consumer durable goods, a crucial sector that was showing decline over many months, posted expansion. "It is better mainly due to government spending, boost from the election and 6th Pay Commission," Crisil Principal Economist D K Joshi said.
CPI(M) Politburo member Sitaram Yechury had earlier said election spending amounted to more than Rs 40,000 crore.
Further down the sectors, the production of processed food products continued to decline, by 14.7 per cent in May. The situation on the food front could get worse as Joshi said, "Going forward the monsoon can be a dampener."
Ahluwalia said compared to a week ago, there has been a progress in the monsoon.
"A much larger part of the country has been covered. I think it is still true that in the north west, the monsoon cumulatively remains deficient. We have to see what the rains (will be) like in July as a whole," the Planning Commission Deputy Chairman said.
Besides, production in as many as eight sectors, including cotton textiles, jute, and metal products, declined.
In broad sector terms, manufacturing, which constitutes around 80 per cent in IIP, grew by 2.5 per cent, mining by 3.7 per cent and electricity generation by 2.7 per cent.
HDFC Bank economist Jyotinder Kaur said, "The IIP is up mainly due to stimulus packages and the 6th Pay Commission. I expect it to be 4.7 per cent for the current fiscal and this would help to spur growth."