India's economy grew 6.1 percent in the June quarter from a year earlier, roughly in line with forecasts as government stimulus helped spur demand, but a poor monsoon threatens to erode growth later in the year even as it drives prices higher. Consumers' share of spending in the Indian economy shrank to 55.6 percent in April-June from 58 percent a year earlier, while the government's share rose to 9.9 percent from 9.6 percent on the back of stimulus spending

Finance Secretary Ashok Chawla predicted growth of above 6.5 percent in the fiscal year ending March 2010, as strength in manufacturing and services offsets weakness in agriculture.

India's economy accelerated from its 5.8 percent rate in the previous quarter on pick-ups in the mining, manufacturing, and electricity and services sectors from the previous quarter. The difficult task facing India's central bank as it looks towards exiting its accommodative monetary policy was underscored by the 11.89 percent surge in India's consumer price index for July from a year earlier. That figure, released on Monday, compared with a 9.29 percent rise in June.