AFP - Tuesday 09 February 2010 01:42PM

India's economy should expand by 7.2 per cent this fiscal year, the government forecast on Monday, as growth heads back to the robust levels seen before the global financial crisis.

The projection for the 12 months ending March 2010 was contained in an estimate by the statistics office for use in drafting next year's budget to be presented at the end of February.

The economy "has clearly turned," said chief government economic advisor Kaushik Basu while finance Secretary Ashok Chawla said growth this year could be even higher once data for the fiscal second half was known.

Monday's forecast marked an increase from the 6.7 per cent growth posted in the previous financial year when India's economy was hit by the downturn in its major export markets.

HSBC economist Robert Prior-Wandesforde said this year's performance should "be trumped by an 8.5 per cent increase" next year - close to the nine per cent average annual figure clocked by Asia's third-largest economy before the global financial system went into a tailspin.

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