According to the latest official data released, India's industrial output increased by an impressive 6.8 percent in January compared to the same month previous year.

Experts were expecting a rise of 2.1 percent, according to a Reuters poll. The figure in January increased 1.8 percent from December. The impressive growth was mainly backed by an increase in production of non-durable goods even as the capital goods and mining sectors fell in the period.

The consumer non-durable goods sector grew 42.1 per cent while capital goods sector recorded a fall of 1.5 per cent compared to 5.3% growth same period previous year.

The overall manufacturing output increased 8.5 percent compared to the same month previous year, showed the data released by the statistics office.

The industrial production recorded an increase of 4.0 percent between April and January. The total out grew 7.8 percent in the 2010-11 financial year till March compared to 10.5 percent growth recorded in the previous year.

Industry leaders have been calling for a cut in interest rates by the Reserve Bank of India (RBI). The RBI recently reduced the CRR announced a reduction in the cash reserve ratio (CRR) by 75 basis points on Friday to boost the slowing economic growth in the country by improving liquidity. The 75 bps cut would increase the liquidity by Rs. 48,000 in the country’s economy and will help in improving production.