The Indian economy will grow 6.5% in the fiscal year, according to the Government

The Indian economy will grow 6.5 percent in the current fiscal year ending March 2010 due to declining agricultural sector and the slowdown of the service, as widely expected today by the Government.

"It is unlikely that growth is less than 6.25 percent, but could reach 6.75 per cent," said the Economic Adviser to the Prime Minister, Manmohan Singh, in a report.

Indian GDP rose 6.7 percent in the period 2008-2009, which ended last March, a fact already reflected the impact of global crisis in India after three consecutive years of growth above 9 percent.

Projections of the Economic, agriculture, economic activity that depend on two thirds of the population, will decline 2 percent in the current fiscal period.

The agricultural sector, which contributes 18 per cent to GDP of the state, had experienced an increase of 1.6% in FY 2008-2009 and 4.9 in the former.

Indian GDP growth will be driven by industry (including construction), for which the Government expects an increase of 8.2%, implying a significant increase to the rise of 3.9 from last fiscal year.

The service sector, which involves more than 55% of GDP, also will accelerate at a rate of 8.2% through March 2010, down from 9.7% the previous year.

"The Indian economy has weathered well the economic crisis and India remains the second fastest growing economy in the world," said council president, C. Rangarajan, after delivering his report to Singh, the news agency IANS.

The Council argued that the rainfall deficit of 22.7% during the last monsoon in the Southwest dogged farming, while falling international demand and rising household savings by the international crisis had an impact negative exports.

Emphasized the control of food price inflation (from 33% in the first half of this year) as one of the areas of political action in the short term, to set at 6% inflation forecast at year end (which accumulated 5.8% in the first half).

Also identified as priorities for the medium term improvement in agricultural productivity and the development of nuclear power and natural gas to combat the country's energy deficit.