Electricity demand in India rose in January for the first time in six months, government data showed on Tuesday, after declining since August as the economy slowed.

Electricity demand, which rose 3.5 per cent in January from a year earlier according to the data, is seen by economists as an important indicator of industrial output.

Economists, however, said it was too soon to say whether the rebound in demand last month pointed to a pickup in the economy as the data also reflected a low base effect last year.

"If it (power demand) continues to grow next month then there may be some green shoots that the finance ministry has been arguing about," said N.R. Bhanumurthy, economist at the government-backed National Institute of Public Finance and Policy in New Delhi.

"But we have to wait for at least another month before we make that conclusion," he said.

January demand for electricity totalled 105.29 billion units, data from the Central Electricity Authority showed.

However, the rise was from a low base, as electricity demand grew in January 2019 at the slowest pace in nearly two years, CEA data showed.

Industry use accounts for more than two-fifths of India's annual electricity consumption, according to government data, with households accounting for nearly a quarter and commercial establishments another 8.5 per cent.

In 2019, electricity demand in India grew at its slowest pace in six years, amid a broader economic slowdown that led to a drop in sales of everything from cars to food products and also has led to factories cutting jobs.

A top adviser to the government on economic issues told Reuters this week that Indian economic growth was poised to bounce back as the government has taken measures to prop up investments and consumer demand.

India's manufacturing activity expanded at its quickest pace in nearly eight years in January with robust growth in new orders and output, a private survey showed this month, although other data has suggested the economy continues to slow.