New Delhi: Indian economy is set to grow by an astounding rate of nearly nine per cent in 2011-12.

The Economic Survey tabled in the Parliament by Union Finance Minister Pranab Mukherjee made it clear that the GDP growth will not be overshadowed by global events like volatility in commodity prices, exacerbated by political turmoil in the middle east.

The Survey for 2010-11 has pegged the economic growth at 8.6 per cent for the current fiscal, helped by broad based rebound in agriculture and "continued momentum" in manufacturing and private services.

Inflation, an area of concern, is expected to be 1.5 per cent higher than projected earlier, it said. Food inflation, in particular, has come as major challenge for the economy.

Days ahead of the General Budget, the Survey indicated the need for fiscal consolidation.

Agriculture growth

The Economic Survey pegged the country's agriculture sector growth at 5.4 per cent this fiscal, as against 0.4 per cent in the previous year.

The Survey also called for a "Second Green Revolution with technological breakthrough in the agriculture sector" to boost farm output and ensure the food security of the country.

Foodgrains production is estimated to rise to 232.07 million tonnes in 2010-11 crop year from 218.11 million tonnes last year.

Other highlights of Economic Survey 2011-12

* Industrial output grows by 8.6 per cent, manufacturing sector rises by 9.1 per cent.

* Net bank credit grows by 59 per cent.

* Inflation may remain high, factory output could fall.

* Slow rate of capacity edition in physical infrastructure constricting industrial growth.

* Capacity edition in core sectors and renewal of bottlenecks would spur industrial sector output in the medium to long term.

* Fiscal deficit at 4.8 percent of gross domestic product, down from 6.3 percent last year.

* In April-December period, exports grew 29.5 percent, imports rose by 19 per cent.

* Trade gaps narrowed to $82.01 billion in April-December period.

Agency inputs