India's economy grew 8.2 per cent on an annual basis in the last quarter of 2010, driven by expansion in the farm and financial service sectors, official data showed on Monday.

Growth in gross domestic product in the October-December period was lower than the 8.9 per cent reading in the previous quarter, data from the Central Statistical Organisation showed.

Output from the farming sector grew 8.9 per cent over the 12 months, boosted by strong monsoon rains, while expansion by finance and property companies measured 11.2 per cent.

The government, which presented its budget on Monday, has forecast growth of about 9.0 per cent in the next fiscal year starting April 1, with the economy expanding at levels seen before the global financial crisis.

As momentum rebounds, inflation of more than 8.0 per cent on an annual basis has emerged as a major problem, fuelled by rising food prices and other major infrastructure bottlenecks.

Finance minister Pranab Mukherjee Mukherjee faces a balancing act on Monday in presenting the nation's budget as he seeks to tame inflation, while sustaining the high growth rates and reining in the deficit.

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

He will have his eyes on a slew of looming state elections and is likely to opt for a "common man" budget laden with food, fertiliser and fuel subsidies, analysts said.

channelnewsasia.com