Buoyed by agriculture growth in the third quarter, the investment banking outfit DSP Merrill Lynch Ltd has raised India's economic growth forecast for the year 2003-04 to 8.5 per cent from eight per cent pegged earlier.

"With the quarterly gross domestic product numbers beating earlier estimates, we expect the economy to grow at 8.5 per cent, agriculture at 10 per cent (7.5 per cent projected earlier) and industry 6.6 per cent (6.3 per cent) in FY-04," DSP ML said in Mumbai on Thursday.

It, however, kept the forecast for the services sector unchanged at 8.7 per cent for FY-04.

India's Growth Projections for 2003-04

Commenting on the GDP growth of 10.4 per cent in the third quarter, DSP ML said, "The growth was exceptionally stronger and higher than our expectations of nine per cent due to 16.9 per cent growth in agriculture."

In the fourth quarter of 2003-04, the economy is expected to grow at 9.3 per cent, aided by 12 per cent growth in the agriculture.