India's economy grew by 6% in the three months from April to June, comfortably ahead of expectations and putting it among the fastest-expanding economies in the world.

The figure is well ahead of last year's 3.5% growth for the same period, and in line with the government's own hopes.

We're sticking to our overall growth forecast of 4.6%, because the two main risk factors of poor rainfall and a global slowdown are yet to be reflected

Sanjeet Singh ICICI Securities & Finance, Bombay

But the performance does not include the hot summer months, during which drought - the worst for 15 years - struck much of the vast, largely agricultural country.

With oil prices rising on fears about war in Iraq, the drought reinforces the Central Bank of India's gloomy prediction that its 6-6.5% growth target may be over-optimistic.

And the International Monetary Fund (IMF) believes 5.5% may be optimistic, thanks to sluggish industrial performance.

The IMF says 8% growth is required if India is to make headway in reducing poverty.

Industry lagging

Before the drought came, agriculture recorded a 4.4% growth rate in the first quarter, up from 1.1% last year.

The nation's industrial performance was less impressive, rising from 2.7% growth last year to 3.8% this year.

But trade, hotels, transport and communications services expanded 7.4% against 4.5%.

Financial services was even more impressive, up 9.7% this year.

Growth 'to remain firm'

Economists acknowledged the performance was better than they had expected.

"Going forward, I expect GDP growth to remain firm for the next two quarters before moderating towards the year-end," said Shuchita Mehta from JP Morgan India in Bombay.

But others noted the risk looking ahead.

"We're sticking to our overall growth forecast of 4.6%," said Sanjeet Singh from ICICI Securities and Finance in Bombay, "because the two main risk factors of poor rainfall and a global slowdown are yet to be reflected."