New Delhi: Indicating that an industrial recovery is underway, India's Economic Survey for 2008-09 said Thursday that the industry has "weathered the most severe part of the shock".

The survey, tabled by Finance Minister Pranab Mukherjee in parliament on Thursday, the first day of the budget session, said the rise in offtake of bank credit and upturn in the power generation capacity were positive pointers towards an economic recovery.

The provision of credit by banks to most individual sectors declined in 2008-09, with only wood, petroleum, chemicals and gems and jewellery sectors reporting a significant increase in available credit.

The provision of funds by banks to mining, food processing, textile, leather and metal industries took a significant drop.

"The sustained inflow of FDI (foreign direct investment) also points to foreign investor confidence in the Indian economy, especially the Indian industry," the survey said.

India's Index of Industrial Production (IIP) declined to 2.3 percent in 2008-09 from 9 percent in 2007-08.

While tobacco and machinery and equipment sectors maintained a high growth rate of over 8 percent in the fiscal, cotton textiles, metal products and petroleum industry reported negative growth rate.

"The decline in crude prices, input prices and interest rates should help the industry to improve their profit margins that have been under pressure," the survey said.