In the month of June the India industrial output expanded beyond estimation. It has been revealed that the strong capital goods production helped the Indian economy to combat the growing menace of global inflation.

It has been reported that for the month of June the India industrial output was 8.8% higher however, the consumer-driven components were weak. The strong momentum in the services sectors of India are suggesting that the country would be able to come out as winner from the debt crisis of Europe and America.

Jonathan Cavenagh, Senior Foreign Exchange Strategist at Westpac Institutional Bank, Singapore said, “Indian data has been resilient in recent weeks, which signals a fair amount of resilience in the economy despite tighter policy from the RBI (the central bank) in the past 18 months”.

However, it is believed that the step by Reserve Bank of India (RBI) of raising the key interest rates by 50 basis points, last month, would make it difficult for the economy to grow. Therefore, analysts are asking RBI to lower down the interest rates.

However, neglecting the plea of analysts, RBI announced today that inflation is potential of going beyond control. Therefore, it will take all necessary steps to combat it.