India's economy is set to grow by a faster-than-expected 8.1% in the year to the end of March, according to a government estimate.
Rising consumer demand is boosting industrial output
It represents the fastest growth in two years, and beats forecasts from Indian economists and the central bank.
Growth is being helped by a boom in the manufacturing and services sectors, set to rise by more than 9%.
A key driver is set to be farm output, which is forecast to grow at 2.3% thanks to decent monsoon rains.
Sixty percent of India's one billion people live in rural areas and a healthy farming industry creates higher demand for goods and services.
"Clearly the resurgence in the services and manufacturing sectors has pushed economic growth to a higher trajectory," said Shubhada Rao, chief economist at Yes Bank in Mumbai.
He said the government would have to announce further business-friendly policies in its next budget if it wanted to sustain current levels of growth.
India's Congress Party-led coalition government has pledged to introduce business reforms that will help keep the economy growing at 7-8% a year.
Prime Minister Manmohan Singh thinks that economic growth could reach as high as 10% in the next few years.