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Indian growth at 8.6% this fiscal year

NEW DELHI, Feb 28, 2011 – India\’s economy will grow 8.6 percent this fiscal year and 9.0 percent next year, Finance Minister Pranab Mukherjee said Monday, soon after data showed below-forecast growth in the December quarter.

"Our growth in 2010 has been swift and broadbased. The economy is back to its pre-crisis trajectory," he told parliament as he gave his forecasts for this and next year during his budget speech.

In the current fiscal year, agriculture would rise 5.4 percent, industry by 8.1 percent and services 9.6 percent. "All three sectors are contributing to growth," he said.

Earlier in the day, the Central Statistical Organisation revealed the economy expanded 8.2 percent on a 12-month basis in the October-December quarter, slightly lower than the 8.9-percent reading of the previous quarter.

In the next fiscal year starting April 1, the economy would grow an estimated 9.0 percent, but inflation will remain a concern, Mukherjee said.

Inflation of more than 8.0 percent on an annual basis has emerged as a major problem, fuelled by rising food prices and other major infrastructure bottlenecks.

Mukherjee faced a balancing act on Monday in presenting the nation\’s budget as he sought to tame inflation, while sustaining the high growth rates and reining in the deficit.

The 76-year-old unveiled the budget as the left-leaning Congress government has come under fierce public and opposition attack over corruption scandals and runaway food prices.

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