New Delhi, Feb 25 (IANS) The outlook for Indian industry has brightened for the medium term but infrastructure bottlenecks, particularly in energy and roads, remain the constraining factors for stepping up growth to a higher level, says the Economic Survey for this fiscal.

'One of the biggest challenges to sustaining and stepping up industrial growth lies in removing the infrastructural impediments,' said the survey tabled Thursday in the Lok Sabha by Finance Minister Pranab Mukherjee.

'Growth in infrastructure not only alleviates the supply-side constraints in industrial production, but also stimulates additional domestic demand,' said the survey, an annual report card on the state of the economy.

India's industrial production, which is on a recovery mode after the slowdown due the global financial crisis, had registered a better-than-expected growth of 16.8 percent in December to log the fastest expansion in a decade.

The robust performance was helped by a strong showing by the manufacturing sector that saw its output surge 18.5 percent.

The report also said, there were signs that a drop in agricultural output had a spill over effect on segments of industry.

'It appears that there is already some spill-over of the slowdown in the agriculture sector affecting some segments of the industry,' said the survey.

The economic survey also observed that while the growth rebound was 'amply evident', said the recovery was not in no measure complete and some labour intensive sectors were still to revive.

'It should be noted that some of the sectors that failed to revive in the current year, like food products, paper, leather, jute and cotton textiles are labour intensive.'