India's annual factory grew by 10.8% in October - the fastest pace in three months - propelled by a higher purchase of consumer durables such as televisions, refrigerators and cars and stronger capital goods output.
Consumer durables output grew by 31% during the month from 10.9% in the previous month while capital goods output growth rebounded to 22% from a contraction of 4.1% in September.
The recent data has prompted the debate whether the Reserve Bank of India would execute another round of rate hike next week during its mid-quarter monetary policy review.
Finance minister Pranab Mukherjee exuded confidence that factory output will clock double-digit growth this year.
"The trend is encouraging. All the three important sectors - industry, agriculture and services - are evenly growing, and making the contribution to the GDP, which is a healthy sign," Mukherjee said.
While consumer non-durables surprisingly moderated to 0.1% from 1.9% in September and remains a concern, basic goods growth was robust at 7.7%. Intermediate goods production also remained strong at 9.5%.
Experts said that demand is consolidating.
"Overall, we expect a moderation in the headline IP numbers, with industrial output growth averaging 8.4% in the current fiscal year," said Sonal Varma of Nomura.