Dec. 11 (Bloomberg) -- India's industrial production growth probably accelerated in October as the onset of the festival season and rising incomes spurred consumer spending.

Production at factories, utilities and mines rose 10 percent from a year earlier, faster than September's 6.4 percent gain, according to the median forecast of 18 economists in a Bloomberg News survey. The Central Statistical Organisation's report is due around noon in New Delhi on Dec. 12.

Demand for cars, mobile phones and manufactured products has risen amid record salaries in Asia's third-biggest economy, spurring companies such as Metro AG and Coca-Cola Co. to expand operations. Consumer spending also got a boost in October as India's 830 million Hindus prepared to celebrate the Deepawali festival of lights and the nation's 140 million Muslims observed Id-Ul-Fitr, which marks the end of the fasting month of Ramadam.

``Higher spending in the festive season was boosted by rising incomes,'' said Dharmakirti Joshi, an economist at Mumbai-based Crisil Ltd., the local unit of Standard & Poor's Ltd. ``Better export growth would have also helped output.''

Indians got the second-highest salary increase in the Asia- Pacific region this year, helped by record economic growth. Wages increased an average 14.8 percent in 2007 from 14.4 percent last year, according to human-resources consulting firm Hewitt Associates Inc.

Accelerating industrial growth, which makes up a quarter of the $906 billion economy, helped the benchmark Sensitive Index to soar 44 percent this year, led by Bharti Airtel Ltd. and Reliance Industries Ltd., which owns India's biggest refinery.

Mobile Phones

Bharti Airtel, Vodafone Group Plc's Indian unit, and other mobile-phone operators in the world's fastest-growing major wireless market jointly added 8.05 million subscribers in October. The nation ended October with 217.14 million cell-phone users, according to the Telecom Regulatory Authority of India.

Company sales also get a fillip during the festive months of October and November as people consider it auspicious to make purchases during the period. Deepavali, the most important festival on the Hindu religious calendar, fell on Nov. 9 this year and Dusshera was on Oct. 21. Muslims celebrated Id-Ul-Fitr on Oct. 14.

Local sales of passenger cars in October rose 14.6 percent from a year earlier to 105,878 units, the New Delhi-based Society of Indian Automobile Manufacturers said. Sales at General Motors Corp. increased almost four times and Maruti Suzuki India Ltd. gained 16 percent.

New Factories

Honda Motor Co., Volkswagen AG and half a dozen other companies plan to spend at least $6.6 billion in India on new factories to cash in on the nation's auto demand. GM is spending more than $300 million to build a second car factory in India.

``The rise in incomes seems to have cushioned the impact of previous interest-rate increases,'' Joshi said. ``Growth is expected to slacken in coming months as the impact of those earlier rate increases begins to have an impact on demand.''

The Reserve Bank of India has lifted its benchmark interest rate nine times since October 2004 to fight inflation, making commercial bank loans more expensive.

The yield on the benchmark 7.99 percent note due July 2017 held at 7.88 percent as of 9:20 a.m. in Mumbai, according to the central bank's trading system.

Industrial output also rose as shipments of manufactured goods including gems and petroleum products increased in October at the fastest pace in 15 months.

India's exports jumped 35.7 percent from a year earlier to $13.3 billion, following a 19.2 percent gain in September.

India's October Production Forecasts

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                Index of Industrial Production
Company                            YoY% Change
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Median                                   9.95%
Average                                 10.18%
High                                    13.40%
Low                                      8.00%
Number of Estimates                         18
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Anand Rathi Securities                   11.1%
Citi                                      8.5%
CRISIL Ltd.                              10.6%
Dun & Bradstreet Info.                    8.5%
Edelweiss Securities                      9.9%
Forecast Singapore                       10.0%
ICICI Securities                         13.4%
IDBI Gilts Ltd.                           9.6%
ING Vysya Bank                            8.1%
Inst. of Economic Growth                  8.3%
JPMorgan Chase Bank                      10.2%
Kotak Mahindra Bank                      10.5%
Lehman Brothers                          12.6%
Standard Chartered Bank                  12.0%
STCI Primary Dealer Ltd.                  8.8%
Thomson IFR                               9.8%
UBS                                       8.0%
Yes Bank                                 13.3%
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To contact the reporter on this story: Kartik Goyal in New Delhi at kgoyal@bloomberg.net.

Last Updated: December 10, 2007 23:04 EST