Mumbai: Industrial production in the country rose by 12.4 per cent in July this fiscal – its highest growth rate in a decade – from a year-ago period.

The Index of Industrial Production (IIP) increased by 10.6 per cent during April-July as against 8.9 per cent in the same period last fiscal, quick estimates of the Central Statistical Organisation (CSO) show.

The record growth in IIP was propelled by a consistently high growth rate in the manufacturing sector output, which rose by 13.3 per cent in July, commerce minister Kamal Nath said.

Manufacturing output had grown by 13.4 per cent in June this year. Mining and quarrying sector recorded six per cent growth while electricity sector registered a growth of 8.6 per cent in July this year.

Food products industry grew at the fastest rate of 26.8 per cent, followed by wool, silk and man-made fibre textiles at 25 per cent.

Transport equipment sector recorded a growth of 22.4 per cent while base metal and alloy industries grew by 19.5 per cent and textile products at 17.3 per cent. Among economic sub-groups, consumer goods sector grew by 17.9 per cent during July while the capital goods sector registered a growth of 15.4 per cent.

The data on industrial production comes amidst projections that the Indian economy is set to grow at rates above nine per cent in the current fiscal.

While analysts expect the economy to continue its robust growth in the second quarter as well, the annual rate of inflation has been moderate at 4.77 per cent during the week ended September 23, and well over the five per cent mark for the half-year period ended September 2006.

The increased industrial production is unlikely to put pressure on interest rates as liquidity in the economy is ample and as such the Reserve Bank of India (RBI) is unlikely to trigger an increase in interest rates in its monetary policy to be announced later this week.