The country’s industrial production grew by 16.8 per cent in December, the fastest in 20 years, reviving speculation that the government is likely to begin unwinding stimulus measures.
Consumer durables production surged by 46 per cent in December, mirroring growing appetite for purchase of televisions and refrigerators.
The capital goods production grew by 39 per cent in December as compared to a year ago, a sign companies are expanding factory capacities to meet rising demands.
Economists said the government is likely to roll back some of the stimulus measures in the budget for 2010-11 to be presented later this month.
The government had announced a 6 percentage point cut in excise duty to 8 per cent for most goods through 2008 and 2009 to help companies ride out the world economy’s worst meltdown in 80 years.
The government expects the economy to return to an 8 per cent-plus growth trajectory next year, higher than this year’s estimated 7.2 per cent.
“I hope we are well positioned for next year, that is fiscal year 2010-11 to have a growth of over 8 per cent,” Planning Commission Deputy Chairman Montek Singh Ahluwalia told reporters.