Industrial output growth gathered some strength in May but mining, manufacturing and capital goods remained weak spots and economists said the Reserve Bank of India (RBI) is unlikely to ease interest rates as it keeps an eye on inflation.
Data released by the Central Statistics Office showed industrial output rose a better-than-expected 2.4% in May compared to 6.2% a year earlier. But data for April was revised downwards and showed a decline of 0.9% from the previously reported 0.1% growth.
The mining sector continued to show weakness and fell 0.9% in May compared to 1.8% growth in the same year-ago month, while manufacturing grew 2.5% in May, slower than the 6.3% expansion in the same month a year earlier. The capital goods sector, which is seen as abarometer for industrial activity, contracted 7.7% in May compared to a 6.2% expansion in May, 2011.
Economists say RBI will maintain its focus on inflation as it still remains stubbornly high.
India Inc has raised the pitch for policy action from the government and RBI to revive growth and boost sentiment.