All major sectors —manufacturing, mining and electricity generation -- showed higher growth. Even consumer durables output rose, indicating robust demand for these products.

The positive data on industrial production helped trim early losses in stock markets, with the benchmark Sensex down by around 40 points now than 80 points in early trade.

Industrial output during the first half of this fiscal has grown 6.5 per cent against five per cent a year ago despite continued fall in demand overseas.

If the trend continues and is not powered just by temporary surge in demand during the festive season, economic recovery will be firm and could make up for decline in farm production and exports.

"Very good set of numbers, reflecting to some extent the ramp up in production to meet festive demand. We clearly see recovery underway and peg the IIP for the year to 8 per cent from 6.3 per cent," Yes Bank Chief Economist Shubhada Rao said.

Among the areas that were a laggard were food processing and consumer non-durables.

Manufacturing output was up 9.3 per cent in September against 6.2 per cent in the same month last year and that of mining was up by 8.6 per cent compared to 5.8 per cent. Electricity generation rose by 7.9 per cent over 4.4 per cent in the comparable period.

Consumer durables, which bore the brunt of the meltdown from October 2008 onwards, grew 22.2 per cent in September even on a high base of 14.7 per cent a year ago.

Intermediate goods production also grew by 10.8 per cent against a decline of 2.5 per cent in September last year and basic goods was up 5.7 per cent against five per cent.

Capital goods also rose by 12.8 per cent on high base of 20.8 per cent.

However, consumer non-durables grew by just 2.6 per cent against 4.8 per cent a year ago.

Twelve out of 17 industries showed a positive growth. However, processed food products declined by 10.2 per cent, beverages by 3.8 per cent jute textiles by 15.3 per cent paper and paper products by 2.2 per cent and metal products by 7.6 per cent.

September is crucial because, it was in this month last year that collapse of US financial services icon Lehman Brothers crippled economies worldwide. Industrial production in India contracted for the first time in 16 years in October last year, though figures were later revised up.