Shocking everyone and beating all kinds of forecasts India's Industrial output grew 13.8 per cent in July on a year-on-year basis. Rising capital goods production and central bank's constant efforts to control inflation helped the country witness such acceleration in industrial production.

Interestingly, the growth as showed by government data, was much higher than analysts' forecast of 7.7 per cent growth.

Buoyed by the July production data, Planning Commission Deputy Chairman Montek Singh Ahluwalia told media that this data shows that it should not be difficult for the country to achieve the 8.5 per cent growth target for the current fiscal. In fact, as per him, the country might surpass the target.

However, now it is expected that with the growth rate relatively under control, the government and the central bank will now focus on curbing inflation, which has almost reached the double-digit mark.

The market reaction to the factory output growth could not be witnessed immediately as Indian financial market was closed on Friday. Nevertheless, analysts expected the market to start with a bullish trend on Monday. But inflation data will remain crucial for investors in the next week.