NEW DELHI, Jan 12: Indian industrial production returned to growth in November, rising 5.9 per cent on an annual basis led by expansion in the manufacturing sector, government data showed Thursday.

The performance was stronger than analysts' expectations and showed Indian industry bouncing back from contraction in October, when output shrank a revised 4.7 per cent year-on-year.

Analysts counselled, however, that the data still revealed weakness in the sector which has been hit by an aggressive cycle of interest rate rises and weak export demand caused by global economic uncertainty.

Output of capital goods such as machinery -a key indicator of investment and future production -fell again, contracting 4.6 per cent on an annual basis.

The president of industry lobby group FICCI, Harsh Mariwala, said demand for capital goods and chemicals was still weakening, even though output of consumer goods had risen sharply.

'It is important that the growth in these two basic sectors is revived for any sustainable growth of manufacturing,' he said in a statement.

Finance Minister Franab Mukerjee called the new figures a 'good sign' and suggested they portended a stronger showing in the near future.

'But for that, we need to take some proactive actions about which I cannot comment on right now,' he told reporters, hinting that new policies were required to help industrial groups.

The Federation of Indian Chambers of Commerce and Industry has been critical of the central bank's persistence in raising interest rates to control inflation despite evidence of softening domestic and foreign activity.—AFP