A rapid expansion in the manufacturing accelerated India's factory output growth to 4.2 percent in July against a marginal rise of 0.9 percent in the like month of last year, official data showed on Friday.
According to the Central Statistics Office (CSO), which released the data on the Index of Industrial Production (IIP), the revised figures for June also stood higher.
The revised figures for June showed a growth of 4.4 percent against a rise of 3.8 percent which was published in the "Quick Estimates of IIP" released on August 12, 2015.
On further analysis of the data the rise in industrial growth for July was attributed to a jump in manufacturing sector's output.
In July, the manufacturing sector, which has the maximum weightage in the IIP, grew by 4.7 percent from a decline of 0.3 percent in the corresponding month of 2014.
The mining sector output rose by 1.3 percent from a marginal increase of 0.1 percent in the like period of last year.
The electricity sector's yields accelerated to 3.5 percent last month, however, it was considerably lower than the surge of 11.7 percent in July, 2014.
As per the revised estimates for June, the manufacturing sector grew by 5.38 percent, electricity segment inched-up by 1.32 percent and mining industry decelerated by 0.49 percent.
Previous figures had pegged the growth of manufacturing sector to 4.6 percent in June, electricity segment to 1.32 percent. The previous data for June had shown that mining industry had decelerated by 0.5 percent.
Cumulatively, the overall industrial output was however slower with a rise of only 3.5 percent in the April-July period from an increase of 3.6 percent in the corresponding months of 2014-15.
The manufacturing sector swelled by 4.00 percent, while the electricity sector expanded by 2.6 percent. Conversely, the mining sector's cumulatively output in the period under review inched up by 0.6 percent.
Furthermore, Friday's data showed that among the six use-based classifications of the index, the output of consumer durables segment expanded by just 11.4 percent in July.
Healthy production was also observed in the capital goods' output which grew by 10.6 percent. The capital goods segment is a key indicator of economic activity.
The basic goods segment rose by 5.2 percent, while intermediate goods grew by 1.5 percent and consumer goods was higher by 1.3 percent.
On the other hand, consumer non-durables segment receded by 4.6 percent.
Overall, 12 out of the 22 industry groups in the manufacturing sector have shown positive growth during the month under review.
Segment-wise, growth was witnessed in plastic molasses (280.5 percent), gems and jewellery (156.1 percent), aluminium conductor (52.8 percent), rice (37.9 percent), cigarettes (37.8 percent), carbon steel (25.5 percent), leather garments (21.8 percent), apparels' (21.7 percent) and rubber insulated cable (20.9 percent).
Segment-wise, high negative growth was reported in the ready-to-eat (-49 percent), air conditioning (-44.7 percent), grinding wheels (-40.3 percent), colour TVs (-35.4 percent), antibiotics (-26.8 percent), furnace oil (-25.8 percent), boilers (-24.7 percent) and aerated waters and soft drinks (-21.2 percent) sectors.
India Inc welcomed the rise in the IIP and expected the growth to continue on the back of the upcoming festive season.
"It is encouraging to see the positive growth in manufacturing over the last few months and we hope that this growth and demand will pick up as we are nearing the festive season," said Jyotsna Suri, president of Federation of Indian Chambers of Commerce and Industry (Ficci).
Suri urged the government to implement supportive policies for stimulating domestic demand and exports.
"Government's efforts on multiple fronts to create an enabling environment for business is going to provide impetus to the manufacturing growth in the future," Suri noted.
Other major industry body the Associated Chambers of Commerce and Industry of India (Assocham) termed the July IIP as "encouraging" and a sign of revival in industrial activity.
The industry body sort the government's support to lower the cost of finance, so that the industry could become competitive.
"RBI (Reserve Bank of India) in its upcoming bi-monthly monetary policy must give due consideration to providing further fillip to the industrial growth and probably announce at least 25 basis points rate cut," said Rana Kapoor, president of Assocham.
"The need is for creating an investment and industry friendly environment that is largely focused on growth, job creation, poverty alleviation and passing the benefits of the economic growth to the lowest sections of the economy."
ZyFin Research's Chief Economist Debopam Chaudhuri said: "However, with just about 50 percent of the industries posting a positive growth in July, there is a long way to go for Indian manufacturing to rebound."
