A surge in performance by the capital goods sector and the manufacturing goods sectors, pushed the industrial production to 4.2 per cent in July against 0.9 per cent growth a year ago. This was way above analyst forecast of a reading of 3.6 per cent.

"July IIP data consistent with steady improvement in GDP numbers. Data for capital goods & manufacturing sectors are noteworthy," Economic Affairs Secretary Shaktikanta Das tweeted.

The IIP was at 3.5 per cent in April-July period against 3.6 per cent in the year-ago period, the Central Statistics Office (CSO) said in a release.

The main contributors to the growth were manufacturing and capital goods sector.

The manufacturing sector, which constitutes over 75 per cent of the index, grew by 4.7 per cent in July 2015 against a contraction of 0.3 per cent in the same month last year.The output of capital goods, a barometer of investment, grew at an impressive rate of 10.6 per cent against a contraction of 3 per cent in the same month last year.

Commenting on the data, Assocham President Rana Kapoor said, "With prices seemingly under control, RBI in its upcoming bi-monthly monetary policy must give due consideration to providing further fillip to the industrial growth and probably announce at least 25 bps rate cut."

RBI is scheduled to announce next monetary policy review on September 29.

With inputs from PTI.