Factory output for the month of July expanded by 4.3 percent compared to 1.17 percent in June, whereas the country's August retail inflation remained largely subdued with a marginal rise.

Factory output growth accelerated in July by 4.3 per cent, but it remained lower than the 6.5 per cent achieved during the corresponding month of the previous fiscal.

The 'quick estimates' of the Index of Industrial Production (IIP) for July showed that manufacturing sector output rate rose 4.2 per cent in July from a year-on-year rise of 7 per cent.

On YoY basis, mining production grew 4.9 per cent from a rise of 3.4 per cent and the sub-index of electricity generation was 4.8 per cent higher from 6.6 per cent.

Among the six use-based classification groups, the output of primary goods, which has the highest weightage of 34.04, grew 3.5 per cent. The output of intermediate goods, which has the second highest weightage, zoomed 13.9 per cent.

While consumer non-durables output rose 8.3 per cent, consumer durables declined 2.7 per cent.

Output of infrastructure or construction goods increased 2.1 per cent, but capital goods' production receded 7.1 per cent.

The retail inflation in August showed a marginal rise to 3.21 per cent from 3.15 per cent in July. Nonetheless, the Consumer Price Index (CPI) in August was lower than the corresponding month of the last year when retail inflation stood at 3.69 per cent.

According to the data, the Consumer Food Price Index (CFPI) widened to 2.99 per cent in August from an expansion of 2.36 per cent in July 2019 and 0.29 per cent in August 2018.

Product-wise, prices of pulses, vegetables, eggs, meat and fish pushed the retail food inflation higher on a year-on-year (YoY) basis. In contrast, decline in the prices of sugar capped the overall food inflation.

The sub-category of food and beverages recorded a 2.96 per cent rise in last month over August 2018. Among the non-food categories, the fuel and light segment's inflation decreased by 1.70 per cent in August 2019.

On IIP, Devendra Kumar Pant, Chief Economist, India Ratings and Research, said: "July 2019 IIP growth increased to two-month high of 4.3 per cent. Unlike June 2019, all three sectors -- mining, manufacturing and electricity -- contributed to IIP growth.

"However, it will be too early to term this as recovery and one has to wait for some more time and completion of the forthcoming festive season to judge whether the industrial recovery is there for real."

Aditi Nayar, Principal Economist, ICRA, said: "While the late surge in monsoon rains has narrowed the YoY gap in kharif sowing to a mild 0.6 per cent as on September 6, 2019, the flooding in certain areas has led to a continued rise in the prices of vegetables such as onions.

"This, in conjunction with an unfavourable base effect, is likely to contribute to a hardening of food inflation in the ongoing month."

Madhavi Arora, Economist, Edelweiss Securities, said: "The current growth-inflation mix has been favourable for counter-cyclical monetary stance... We see scope for more (monetary policy) easing."