India's economy grows 8.1 percent in the firsr six months

India's economy expanded @ 8.1% in the April to Sep halfyear period compared to a year ago. The figure for the fiscal half-year surprised many analysts, who had expected growth to slow down through the year because of soaring oil prices and suspected sluggish exports.

But government data showed manufacturing growth averaged 10.2% during the period despite a slowdown in the second quarter, while the services sector continued to remain as robust as before. Financial and real estate services grew 9.1 % in the first six months compared to the same period 12 months ago.

The latest update came a day after Indian Prime Minister Manmohan Singh predicted 7.5 % growth for the current fiscal year through March 2006, and said the country should aim to accelerate the pace to 10 % in 2 to 3 years.

Mr.Singh said his government was giving a big push to agriculture sector, which has long been a drag on the broader economy and kept India from catching up to its main economic rival, China. Agricultural output grew 2 % in April-September, flat from a year ago.

Optimism about India's economic potential has lifted the nation's stock markets to record levels, with the 30-share benchmark index of the Bombay Stock Exchange - the Sensex - crossing the 9,000 points mark for the first time on Monday.

The stock rally since late April has been driven by foreign funds which have pumped a record $8.5 bn (
Euro 7.2 bn) into Indian shares.

Overseas investors are increasingly looking to India, which has been one of the world's fastest growing economies over the past few years and is increasingly opening up to foreign competition.