India’s Industrial Production at a four month high.

India’s industrial production is growing at its fastest pace in four months as a direct result form record investment in power plants and factories that are responding to the sudden increase in demand for both electricity and cement.

The Deli Statistics office revealed today that production in factories was up by 8.6 percent from a last year.

Reliance Power Ltd is planning on spending $28 billion over the next five years to build 13 generating plants.

80 percent of India’s industrial production comes from the manufacturing industry, which grew by 8.6 percent from last year, whilst electricity output rose 9.8 percent.

On the other hand Videocon Group India’s largest consumer-electronics has announced that they fear that growth will not be sustained as a result on increased borrowing costs and overriding threat caused by inflation which is likely to curb consumer spending.

The central bank of India is said to prefer to tighten money over raising policy rates and cause the rupee to appreciate.

Currently Inflation is running at 7.41 percent, which is the highest rate to three years.

In her fight against inflation India might have to settle for much slower growth rates, although the Finance Minister Palaniappan Chidambaram said that he expects Asia’s third largest economy to grow by around 8 percent even though growth have average 8.7 percent for the last three years.

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