The July-September quarter, that beat economist expectations of around 8.2 percent GDP growth, was boosted by a 9.8-percent jump in manufacturing over a year earlier and an 8.8-percent leap in construction.

Farm production, which recorded a 4.4 percent increase due to bountiful monsoon, also gave a strong push to the Asia's third-largest economy. Mining sector growth stood at eight percent compared to 10.1 percent in the second quarter of the last fiscal year.

The data highlighted the strength in India's economy, which continues to grow at a robust pace even as advanced economies are struggling to emerge from a prolonged slowdown.

"Now that the figures for two quarters are favorable, I am revising my conservative estimate of (growth from) 8.5 percent to 8.75 percent for the fiscal year," said India's Finance Minister Pranab Mukherjee.

India's central bank Gov. Duvvuri Subbarao in early November raised the benchmark repurchase rate and the reverse repurchase rate by a quarter-point each to 6.25 percent and 5.25 percent, saying inflation continues to hold above the "comfort zone".

That was the sixth time in this fiscal that the apex bank had raised key lending and borrowing rates to cool inflationary pressures in the economy.

Indian Prime Minister Manmohan Singh last month said improved infrastructure will prove critical to sustaining the country's economic growth rate.

Separately, C. Rangarajan, chairman of the Prime Minister's Economic Advisory Council, said on Tuesday that India's economy is expected to grow nine percent in the year to March 2012.

Tuesday's growth figure is likely to bolster the RBI commitment to fight raging inflation through further monetary tightening. "RBI will decide (on monetary action) depending on behavior of inflation in the month of December," said Rangarajan.

He expected wholesale price inflation to fall between 5.5-6 percent by March 2011 from 8.62 percent in September this year and said that there could be decline in food prices in the coming month.

The government raised the previous quarterly GDP readings as it switched to a new wholesale price index-based series that uses 2004-05 as the base year, the Finance Ministry said in a statement.

After slowing to 6.7 percent during the global financial crisis, India's GDP grew 7.4 percent in the fiscal year to March 2010 and is expected to grow more than 8.5 percent this year, according to government estimates.

Indian government, which hopes to return to its pre-crisis growth rate of nine percent in the next fiscal year, is ultimately hoping to achieve double-digit growth and outpace its larger northern neighbor, China, the only major economy growing more quickly than the Asia's third-largest economy.