As industry grew by 2.7 per cent in May, the government said factory production is showing signs of improvement, reflecting that the country is back on the trajectory of growth.

"The IIP is showing a further improvement ... this is what we were expecting, what we have been saying for some time now and except capital goods and non-consumer durables, the rest are certainly looking much better. I think we are back on track as was expected," Finance Secretary Ashok Chawla said in New Delhi.

He said the trend of growth will continue and the sectors which have seen "slight" negative growth will improve in the coming few months.

According to the official industrial data, industry grew 2.7 per cent in May, more than double the 1.2 per cent in the previous month.

During the month, manufacturing sector output rose by 2.5 per cent, while mining and power generation grew 3.7 per cent and 3.3 per cent, respectively.

The consumer durables sector, which includes TV sets and refrigerators, posted a high growth rate of 12.4 per cent against 2.8 per cent in May 2008, reflecting a pick-up in demand.