India's factory output grew by the 6.8% in January, the fastest in seven months, rekindling hopes of an industrial rebound buoyed by a robust manufacturing sector, latest data released on Monday showed.
Factory output had grown by a slower 2.5% in December and by 7.5% in January last year.
Capital goods output, however, contracted by -1.5% in January mirroring a slowdown in investment as corporations, squeezed by high borrowing and input costs, defer planned expansions. "January (IIP)... is strong recovery in the backdrop of last December's figure," finance minister Pranab Mukherjee said.
All eyes will be on the finance minister on the overall policy direction and measures he announces in the budget.
The Reserve Bank of India (RBI) will present its mid-quarter review, but analysts do not expect the central bank to slash interest rates on Thursday.