India's industrial output increased by 2.4 percent in January as against a contraction of 0.6 percent in the previous month, giving an indication of revival in the Asia's third largest economy, the government data showed Tuesday.
Electricity output increased by 6.4 percent and manufacturing production registered a growth of 2.7 percent during the month under review. However, mining production slumped by 2.9 percent in January.
The factory output measured in terms of the Index of Industrial Production (IIP) has registered a cumulative growth of 1 percent in April-January 2012-13 period year-on-year, according to data released by the Central Statistics Office (CSO).
The cumulative growth for electricity sector in the first 10 months of the current financial year is 4.7 percent. Manufacturing output has increased by 0.9 percent, while mining production has declined by 1.9 percent during the period under review.
Planning Commission Deputy Chairman Montek Singh Ahluwalia said the monthly data gave an indication of revival in the economy.
"Basically the downside is over," Ahluwalia told reporters while reacting on the monthly data.
However, industry leaders said the sluggish factory output remained a concern as the positive January figures were on low base.
"The growth in industrial and manufacturing sector remains an area of concern as positive growth of 2.4 percent in January 2013 comes over a low base. With 50 percent of manufacturing sectors registering negative growth, any sustained growth remains elusive in the sector in immediate future," said Naina Lal Kidwai, president, Federation of Indian Chambers of Commerce and Industry (FICCI).
"Fixed investments, particularly the private sector investments, are drying up which is also evident from the negative growth of capital goods sector for nine out of the 10 months," she said.
As per "use-based" classification there was positive growth in basic goods at 3.4 percent, intermediate goods at 2 percent and consumer non-durables at 5.3 percent.
However, capital goods segment registered a decline of 1.8 percent and consumer durables output fell 0.9 percent.
"While some signs of revival of industrial activity are indicated, it is too early to assume that the slowdown has bottomed out and green shoots of recovery are around the corner," said Adi Godrej, president, Confederation of Indian Industry (CII).
"If we factor in the base effect, the performance of industry is still below potential. But we hope that the growth in industry, though modest, would signal a beginning of a turnaround and we would expect much better figures, going forward," Godrej said.
President of the Associated Chambers of Commerce and Industry (Assocham) Rajkumar Dhoot said the data was positive but it did not give an indication that the Indian industry was "out of the woods".