Industrial growth recovered to 7.1 per cent in July from the dismal performance in previous two months of the current fiscal, even though it moderated compared with 8.3 per cent recorded a year ago.
The improved data may give some breather to the government and Reserve Bank of India, struggling hard to check the double-digit inflation through tightening monetary policy, which hampers the growth process.
While the manufacturing, which contributes about 80 per cent to IIP, grew by 7.5 per cent in July, compared with 8.8 per cent a year ago, electricity generation was up by 4.5 per cent, against 7.5 per cent.
Mining output growth, however, was quite higher at 5 per cent from 3.2 per cent a year ago.
The growth in industrial production, as measured by the Index of Industrial Production, was low at 3.8 per cent in May and 5.4 per cent in June.
In April, however, industrial growth stood at 7 per cent, more or less same as in July.
As such, industrial growth turned out to be 5.7 per cent in the first four months of this fiscal, against 9.7 per cent a year ago.
The data came close to first quarterly economic growth figures at 7.9 per cent and would play a crucial role for the GDP figures for the next quarter.
If, this trend continues and other sectors like agriculture and services also contribute, GDP figure may be quite higher for the second quarter, analysts said.