New Delhi:  After turning negative in the previous month, industrial production bounced back to a five-month high of 5.9 per cent in November 2011 led by a recovery in manufacturing, a development that may reverse the negative sentiments.

Encouraged by the good factory output numbers in November, the government said it would adjust the policies to sustain growth momentum.

"If this trend in the numbers continues, perhaps we can expect to have a better performance (during December-March). We need to build on this recovery with a stronger performance in the remaining months of the current financial year. The focus will have to be accordingly adjusted," Finance Minister Pranab Mukherjee said.

Factory output, as measured by the Index of Industrial Production (IIP), grew by 6.4 per cent in November, 2010. In October 2011, it had shrunk by 4.74 per cent.

During the April-November period of the current fiscal, IIP growth stood at 3.8 per cent compared to 8.4 per cent in the same period of 2010-11.

 "Clearly, the industrial growth of almost 6 per cent is a good change. I think it hopefully indicates that slowdown in industry will basically come to an end during the third quarter (October to December) of the financial year," Planning Commission Deputy Chairman Montek Singh Ahluwalia said.

However, industry chambers said the recovery in November must be seen with "caution" as the performance of critical sectors like capital goods remains poor and called upon the RBI to slash key interest rates at its next quarterly review of monetary policy on January 24.

"The rebound in industrial growth as per November IIP figures need to be seen with caution as some of the fundamental trends remain weak," Ficci President Harsh Mariwala said.

As per the data, the November output of the manufacturing sector, which constitutes over 75 per cent of the index, went up by 6.6 per cent compared to a growth of 6.5 per cent in the same month of 2010.

Electricity grew by robust 14.6 per cent in November, 2011, compared to 4.6 per cent in the same month of 2010.

Production of consumer goods also witnessed a 13.1 per cent upswing during the month under review, as against growth of a mere 0.7 per cent in the corresponding month of 2010.

"I think the industrial production will pick up in the second half of the year. The indications as thrown up by the data for November may continue into the rest of the months of the current fiscal," the Prime Minister's Economic Advisory Council (PMEAC) Chairman C Rangarajan said.

The good news in the industrial production front comes after months of sluggishness. IIP growth had been 3.66 per cent in July, 3.4 per cent in August and 2 per cent in September, before it contracted in October.

The economic growth stood at 6.9 per cent in the second quarter of the current fiscal, the lowest in over two years. India Inc had blamed the high interest rates, resulting from 13 policy rate hikes by RBI between March 2010 to November 2011, for hindering investments and industrial slowdown.

"I think the IIP number for the month of October was an aberration in some way. While the overall growth rate in the industrial production may not be as strong as last year, it will not be too bad," Rangarajan added.

Experts said the growth in November numbers has given a much-needed boost to the economy.

(Agencies)