In a development that should bring comfort to India's central bank to ease interest rates, the country's factory output grew at 2.5 percent in September even as retail inflation to a record low of 5.52 percent during October.
Industrial activity, measured in terms of the Index of Industrial Production (IIP), grew by 2.5 percent during September over the corresponding month of the previous year, government data showed Wednesday.
The IIP had increased by 2.7 percent in September, 2013. In August, 2014 the industrial growth stood at 0.4 percent, the Central Statistics Office data showed.
The IIP in July had grown by 0.5 percent, while in June it stood at 3.9 percent.
The cumulative growth for April-September 2014-15 stood at 2.8 percent while the figure for the corresponding period of the previous year stood at 0.5 percent.
The gain in September came mainly due to the higher output of electricity and manufacturing sectors.
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In September, the electricity sector grew by 3.9 percent from 12.9 percent in the corresponding month of the previous year.
Manufacturing sector picked up by 2.5 percent from 1.4 percent growth in September, 2013.
The mining sector rose 0.7 percent from 3.6 percent increase in the corresponding month of the previous year.
Capital, basic and intermediate goods showed healthy growth. Fifteen out of the 22 industry groups in the manufacturing sector have shown positive growth during the month under review.
Capital goods grew by 11.6 percent, basic goods rose by 5.1 percent and intermediate goods increased by 1.8 percent
India's consumer price index-based inflation slowed to a record low of 5.52 percent during October 2014, from 10.17 percent during the corresponding month last year, on the back of lower food prices and fuel costs, official data released during the day showed.
The retail inflation rate recorded is the lowest since India started computing consumer price index (CPI) in January 2012.
The retail inflation stood at 6.46 percent in September 2014.
Rural inflation stood at 5.52 percent versus 6.68 percent in September and urban inflation came down at 5.55 percent versus 6.34 percent in September.
The latest data assumes significance as Reserve Bank of India (RBI) had set a target for CPI inflation at eight percent by January 2015 and six percent by January 2016.
In October, vegetables inflation decelerated by 1.45 percent. Sugar became costlier by 0.37 percent year-on-year.
Milk and milk products became dearer by 10.79 percent and fruits became costlier by 17.49 percent.
Cereals became costlier by 6 percent. Prices of pulses jumped by 7.51 percent.
Commenting on the industrial production for September, the Confederation of Indian Industry (CII) said the upturn in industrial production means the economy is showing early signs of revival based on the "feel good" factor and positive investor sentiment.
"CII also welcomes the drop in inflation based on consumer price index and hopes that this would propel the RBI to reduce policy rates in its forthcoming monetary policy especially as consumer demand continues to be tepid," it said in a statement here.