India's industrial production jumped for the second month in a row in a boost for the new Narendra Modi-led government which faces a huge challenge to revive the ailing economy, data showed Friday.
Output grew a better-than-expected 4.7 percent in May year-on-year after recording a 3.4 percent increase in the previous month, the government said in a statement.
Manufacturing, accounting for over three-quarters of the Index of Industrial Production, grew 4.8 percent, while mining rose 2.7 percent and electricity 6.3 percent, the statement said.
Output of capital goods such as plant equipment, a harbinger of future investment, increased 4.5 percent, it said.
The figures come one day after Modi's government unveiled its maiden budget, promising a new era of fiscal discipline, higher growth and greater opportunities for foreign investors.
Modi, whose right-wing party came to power after winning landslide elections in May, faces an uphill battle to reform and kickstart the economy which has been stuck in low gear.
The economy grew by just under five percent last year -- half the rate of just a few years ago.
Confederation of Indian Industry director general Chandrajit Banerjee said the rise in output provided "a glimmer of hope that the economy could be bottoming out and recovery could be on the anvil."
He urged the government to implement initiatives announced in the budget, which included opening the defence and insurance sectors to direct foreign investment and more spending, through public-private ventures, on infrastructure.
The change in government has sparked an investor buying spree on the Indian stock exchange, on expectations of an impending turn-around in the economy.
In another encouraging sign for the government, India's exports jumped to a six-month high in May, figures released last month showed.