In the current fiscal year India's economy is expected to grow 8.6%, the government said. This its highest rate for three years despite a series of interest rate hikes.
The estimate for the year to March 31 was based on growth rates of more than 8% in key sectors such as manufacturing, construction, finance, real estate and business services, the Central Statistical Organization said.
India posted average annual growth of 9.5% between 2006 and 2008 before the global downturn slowed expansion to 6.7% in 2008-09. The economy picked up last year to grow at an upwardly revised rate of 8%.
The figures came after Prime Minister Manmohan Singh warned that high inflation posed a "serious threat" to the country's growth momentum. With New Delhi under pressure to curb inflation, particularly soaring food prices, the central bank has already hiked interest rates seven times in under a year, and is expected to raise them again next month.
Some analysts have voiced concern that the aggressive hikes could slow growth and jeopardize the government's goal of attaining the double-digit economic expansion it needs to significantly reduce poverty.
Copyright Agence France-Presse, 2011