The Central Statistical Organization (CSO) has pegged the country's gross domestic product (GDP) growth level in 2005-06 at 8.1 percent, powered by strong manufacturing and services.

The estimate for Asia's third-largest economy was higher than last year's 7.5 percent growth and spurred speculation that interest rates could be tightened for a fourth time in 12 months to cap inflationary pressures.

This surpasses the expectations of both the Reserve Bank of India (RBI) and the Finance Minister, P Chidambaram. During the third quarter review of the monetary policy, the RBI had, placed its GDP growth estimates at 7.5-8 percent, up from 7-7.5 percent earlier. The Finance Minister has been talking about 7 percent plus growth for the current financial year.

According to the organization report, the sectors that are likely to push up the growth rate are manufacturing, which the CSO expects to grow at 9.4 percent (8.1 percent), agriculture at 2.3 percent (0.7 percent), and trade, hotels, transport and communication at 11.1 percent (10.6 percent). While financing, insurance, real estate, and business services are estimated to grow at 9.5 percent (9.2 percent), the growth in electricity, gas and water supply sector has been estimated at 5.4 percent (4.3 percent).

(www.siliconindia.com)