India's industrial output rose 5.8 per cent in the year to March 2003 boosted by a robust manufacturing sector despite fears the country's worst drought in 15 years would hurt demand in Asia's third-largest economy.

Data released by the government's Central Statistical Organisation on Monday showed output was up from a meagre 2.7 per cent in the previous year when a global and domestic slowdown hit demand.

Industrial output has been maintaining a steady pace in the past few months, rising 5 per cent in December and 6.4 percent in January and February.

Output rose 6 per cent in March 2003 compared to 3.2 per cent in the same month a year ago.

Manufacturing, which accounts for about 80 per cent of industrial output, jumped 6 per cent in 2002/03 compared with a paltry 2.9 per cent in the same period a year earlier.

It rose 6.8 per cent in March 2003 compared to 3.2 per cent in the same month a year ago.

Industry accounts for 27 per cent of India's GDP but contributes a large chunk to government revenues as the vital agricultural sector, a mainstay of the world's 12th largest economy, is untaxed.

The capital goods sector, a barometer for industrial activity, surged 10.34 per cent in 2002/03 compared with a decline of 3.4 per cent in the year-ago period.

Consumer non-durables, which range from shoes to shampoos, rose 12.3 per cent in the year to March 2003, up from 4.0 per cent in year-ago period.

The Indian economy is estimated to grow at 4.4 percent in 2002/03, down from 5.6 per cent in the previous year because of a slump in farm output. Nearly 70 per cent of India's more than one billion people depend on agriculture for a living.