The expansion in production by factories, mines and utilities sharply exceeded analysts' forecasts of 5.5 percent and marked a rebound from May when output grew by a revised 5.9 percent.

The June performance was boosted by manufacturing output, which jumped 10 percent year-on-year, while capital goods production soared 37.7 percent, the Central Statistical Office said

The figures are good news for India's central bank, which has been under pressure from businesses pause its cycle of hiking interest rates because of fears about faltering industrial activity.

The bank has hiked benchmark lending rates 11 times since March 2010 to curb stubbornly high inflation, which is being caused by higher food and fuel prices.

Other economic indicators recently have suggested that Asia's third-largest economy is slowing and private economists have revised down their expectations of economic growth this financial year.

The central bank has said higher rates are necessary even if it means sacrificing some economic growth.

The latest output data came after data on Thursday showed that weekly food inflation had quickened to its highest pace in more than three months, rising to 9.9 percent from a year earlier.

Copyright AFP (Agence France-Presse), 2010